Why Figma's Acquisition of Weavy Is the Most Important Move of Its AI Strategy

Design software company Figma (NYSE: FIG) went public on July 31 at $33 per share to much fanfare. Shares eventually soared to a 52-week high of $142.92 in August, but have since crashed back to Earth.

Figma's sky-high valuation contributed to the drop. But the stock may be poised for a rebound in 2026. The company sees artificial intelligence as a key component of its growth strategy. As part of that, in October, Figma acquired Weavy, a start-up focused on AI-powered design solutions.

To evaluate whether Figma is a compelling investment, let's unpack how the Weavy acquisition supports the company's AI approach in the design field.

Image source: Getty Images.

How Weavy helps Figma

Figma's AI strategy centers on enhancing, not replacing, human creativity. The company views AI as a vital tool for streamlining tasks and supporting customers in achieving their creative visions. As the company espouses, "In a world with more software... design and craft are the differentiators."

Given this approach, how does Weavy impact Figma's AI success? Weavy uses AI to create digital images and videos, but that doesn't sound different from typical AI image generators such as OpenAI's ChatGPT.

Weavy's critical differentiation from competitors is that it doesn't rely solely on user prompts, then mechanically generate results. It integrates multiple AI models into a single interface. This allows the user to choose the AI tool best suited for a task. On top of that, Weavy combines AI with professional editing software to enable seamless back-and-forth collaboration with the user, while providing precise control and customization over the final output.

Figma CEO Dylan Field explained the strength of this process, stating, "The end result is an inspiring environment for creative exploration and a flexible media pipeline where every output feeds the next." In this way, Weavy makes AI an integral component of the design process rather than a hack bolted onto the user's workflow. The company likens its AI use to clay, stating, "it's messy, powerful, and meant to be molded."

The approach helps users with a wide range of tasks, such as assembling visual workflows and deconstructing an image into editable layers akin to popular graphics editor Photoshop, owned by Figma's rival Adobe. Weavy, now rebranded Figma Weave, is already used by architects, product designers, marketing personnel, and visual effects artists for movies, television, and video games.

AI's impact on Figma

Weavy demonstrates how AI can fit into and enhance the work people do today. Field believes Weavy's tech represents an evolution in the application of AI, stating, "Good enough is simply not good enough... you have to push beyond the prompt with design, with craft and with a bold point of view to build something that truly stands out."

The Weavy acquisition adds to AI efforts such as Figma's integration with ChatGPT. Through OpenAI's chatbot, users can access Figma tools to quickly generate a variety of content, including diagrams, flowcharts, and presentations.

The company's AI investments contributed to record third-quarter revenue of $274.2 million. This amount represented a strong 38% year-over-year increase, thanks to the addition of new customers.

Figma also exited Q3 with a strong balance sheet. Total assets were $2.1 billion with more than $1.5 billion in cash, cash equivalents, and marketable securities. Total liabilities were $684.7 million, but $473.6 million of that represented deferred revenue, which are up-front customer payments that are recognized as sales after services are delivered.

However, due to one-time stock-based compensation costs related to the company's initial public offering (IPO), its Q3 net loss ballooned to $1.1 billion from $15.6 million in 2024. That staggering sum contributed to Figma's share price decline despite its strong Q3 sales growth.

Is now the time to buy Figma stock?

Due to the share price drop, Figma's stock valuation has become more appealing. This can be seen in the price-to-sales (P/S) ratio, which measures how much investors are paying for every dollar of revenue generated over the trailing 12 months.

Data by YCharts.

The chart reveals Figma's sales multiple has dropped substantially since its IPO. However, it remains far higher than competitor Adobe's P/S ratio of 6. This suggests Figma shares remain pricey.

Nevertheless, its acquisition of Weavy is a strong addition to the company's AI strategy, contributing to Figma's ability to continue attracting customers. But given its current valuation and brief history as a public company, Figma remains a risk to invest in unless it can notch robust revenue growth in subsequent quarters.

Consequently, while Figma is an innovative tech design company, only those with a high risk tolerance should consider investing. Other investors may want to see how Figma performs over the next few quarters before deciding whether to scoop up shares.

Robert Izquierdo has positions in Adobe and Figma. The Motley Fool has positions in and recommends Adobe and Figma. The Motley Fool recommends the following options: long January 2028 $330 calls on Adobe and short January 2028 $340 calls on Adobe. The Motley Fool has a disclosure policy.