Figma stock drops 12% after Google releases vibe design product Stitch

Figma’s This year’s decline, driven by concerns about artificial intelligence, has intensified in the last two days Google Launched an artificial intelligence-supported design product.

Tuesday on Google launched A new product in beta called Stitch allows users to enter a prompt to create a design for their project. Google claims the feature is a “design agent” that responds to voice and can give real-time design critiques.

Google doesn’t charge for Stitch and doesn’t make any promises about the service’s availability. But with Wall Street nervous about all the potential threats from AI, Figma is being punished.

Shares of Figma fell 8% on Wednesday, followed by a decline of more than 4% on Thursday. The stock is down nearly 35% this year, falling alongside a broader decline in the software industry.

A Figma representative declined to comment.

Figma went public in July, reassuring investors that the company is positioned to benefit as more users turn to AI products for design. Adobe tried to buy figma in 2023, but ultimately ended the planned $20 billion deal due to regulatory hurdles.

Adobe shares are down nearly 3% in the last two days.

If Google launches its new feature for paying customers in the future, it could represent an effort to have more say in the product design workflow and keep users within its corporate ecosystem. The company has deep pockets, wide distribution and a desire to package products.

Google did not immediately respond to a request for comment.

Google Cloud and Figma in October announced It’s an expanded partnership that includes adding more of Google’s generative AI technology to Figma’s platform. The Figma Make tool allows people to create or modify app designs of Anthropic and Google’s AI models by typing a few words.

— CNBC’s Jordan Novet contributed to this report.

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