Figma's stock drops 11% in two days after Google releases 'vibe design' product

Core Viewpoint - Figma's stock has experienced a significant decline due to concerns over competition from Google's newly introduced AI-powered design product, Stitch, which has raised fears about the impact of AI on Figma's market position [1][2][3]. Company Performance - Figma's shares dropped 8% on Wednesday and more than 3% on Thursday, resulting in a total decline of approximately 35% for the year [3]. - The company went public in July, initially positioning itself to benefit from the increasing adoption of AI in design [3]. Competitive Landscape - Google's new product, Stitch, allows users to create designs through prompts and provides real-time critiques, posing a potential threat to Figma's market share [2][4]. - Adobe's shares have also seen a decline of about 4% over the past two days, indicating a broader impact on the software industry due to these developments [4]. Strategic Partnerships - In October, Google Cloud and Figma announced an expanded partnership, integrating more of Google's generative AI technology into Figma's platform, which may help Figma leverage AI capabilities despite current challenges [5].