Citi has begun coverage of Figma with a Buy/High Risk designation and assigned a $36 price target, saying the market may be mispricing the company's capacity to turn artificial intelligence features into meaningful revenue despite rising competition from lower-cost and AI-native design tools.
The brokerage argues that fears AI-driven efficiencies will shrink the pool of paid seats are likely overstated. Citi expects that any reductions in headcount or seat growth resulting from automation will be balanced - and potentially outweighed - by a combination of customers moving to higher-tier subscriptions, broader adoption among non-design users and increased consumption of paid AI services.
Those conclusions come after Citi conducted customer and go-to-market checks across hyperscale technology providers and large financial-services companies. The bank reports observing evidence of users upgrading to premium seat tiers and an uptick in purchases of AI credit packs, which Citi interprets as a sign that Figma’s AI monetization initiatives are beginning to gain traction.
On the numbers, Citi’s revenue estimates for the second quarter and for fiscal 2026 sit 7 and 9 percentage points, respectively, above Wall Street consensus. The bank says its modeling assumes that revenue from AI-related seat upgrades and usage-based services will more than offset any moderation in net seat expansion.
Citi also provided a market-sizing view, estimating Figma’s total addressable market at roughly $25 billion in 2025 with only about 4% penetration today. The firm projects that the opportunity set could expand to around $50 billion by 2029 as Figma widens its product portfolio and the range of use cases it targets. Citi highlights AI as a potential accelerant for adoption by making new application development more feasible and by drawing in knowledge workers who previously were not primary targets for the company.
Looking ahead, the bank flagged several potential catalysts that could help validate its thesis: Figma’s forthcoming Config conference, new product rollouts, monetization tied to its Model Context Protocol (MCP) server initiatives and continued deployment of AI features. Citi balances those upside elements against a near-term headwind - a final lock-up expiration that is expected in mid-August.
In valuation terms, Citi’s $36 price target equates to roughly 9.4 times enterprise value to fiscal 2027 revenue. The brokerage views that premium as justified by Figma’s growth prospects and the upside it anticipates from AI-driven revenue streams. Citi also notes that Figma’s valuation remains modest when compared with larger software peers such as Salesforce and Adobe, and that the present valuation is below a previously reported $20 billion acquisition proposal from Adobe despite Figma’s continuing growth.
Overall, Citi’s initiation frames AI not solely as a cost-reduction threat but as a potential lever for higher-value monetization, broader adoption and new revenue channels. The bank’s checks and forecasts reflect confidence that usage-based AI products and seat-tier migrations can offset pressure on seat counts, while several near-term events and product developments could act as validating milestones for that view.
Analyst note: Citi’s initial coverage packages a Buy/High Risk rating with a $36 target, and its modeling positions AI-related monetization as the primary driver of upside versus concerns around seat expansion.