Figma's AI Push Pressures Profits, Software Stocks Take a Hit

Software stocks took a hit on Wednesday after Figma's quarterly results showed that its heavy investment in AI features is putting pressure on profits.

Figma's shares plummeted over 16% despite beating analyst estimates for Q2 revenue, which rose 48% to $370.1 million.

The company's CFO Praveer Melwani said Figma wants to invest in new products to ensure durable growth over the long term, justifying the sharp increase in spending.

Adobe and Salesforce, rivals of Figma, saw their shares decline 1.8% and 4.7%, respectively, while Intuit and ServiceNow fell 2.7% and 3.2%.