Figma Shares Fall 8% After Google Stitch Upgrades

Figma Inc.'s shares plunged nearly 8 percent on Wednesday, extending a turbulent period for the collaborative design software company, after Google announced major upgrades to its Stitch platform, positioning it as a direct rival in the AI-powered user interface design market.

The decline came hours after Google Labs revealed enhancements to Stitch, including a new "vibe designing" feature that allows users to generate polished UI layouts and frontend code through natural language prompts, skipping traditional wireframing steps. "When vibe designing in Stitch, you can explore many ideas quickly leading to a higher quality outcome," Google stated in its announcement. The platform now also supports voice commands for real-time adjustments, such as changing color schemes or navigation elements, and includes templates tailored to sectors like SaaS dashboards, healthcare applications, entertainment platforms, and utility services. These updates target the same professional designers and product teams that form Figma's core customer base.

By midday Thursday in New York, Figma's stock, traded under the ticker FIG on the New York Stock Exchange, remained down about 5 percent, closing...