Key Takeaways
- Figma and UiPath are two AI-powered companies that utilize artificial intelligence to streamline workflows and automate repetitive tasks.
- Figma’s cloud-based UI and UX design tools are challenging Adobe, while UiPath’s software robots automate tasks traditionally performed by human employees.
- Figma is growing rapidly, but its costs are rising, and its margins are shrinking, making it a less attractive investment option.
- UiPath, on the other hand, is focusing on cutting costs and streamlining its operations, making it a more compelling AI play in the current market.
- The slower-growth company, UiPath, might be the safer bet in this frothy market due to its rising profits and lower valuation.
Introduction to Figma and UiPath
Figma and UiPath are two companies that are utilizing artificial intelligence (AI) to revolutionize the way businesses operate. Figma, a cloud-based UI and UX design tool, uses AI to generate design ideas and prototypes, auto-edit content, create summaries, and output code. On the other hand, UiPath’s software robots automate repetitive tasks, such as data entry, mass emails, and onboarding new customers. As stated in the article, "Figma’s cloud-based UI and UX design tools can run natively within a web browser without requiring local installation, making them more lightweight and scalable than traditional UI/UX development tools from Adobe and other software makers."
Figma’s Growth and Challenges
Figma has been growing rapidly, with its revenue increasing by 48% to $749 million in 2024. However, the company’s costs are rising as it expands its newer products, including Figma Draw, Figma Sites, and its AI tools. As a result, its margins are shrinking, and it incurred a net loss of $732 million in 2024. According to the article, "Figma is growing rapidly, but its costs are rising as it expands its newer products, including Figma Draw, Figma Sites, and its AI tools. Its margins are shrinking as it ramps up its cloud infrastructure, sales, and marketing spending." Despite its growth, Figma’s stock isn’t a bargain, with an enterprise value of nearly $17 billion and a price-to-sales ratio of 13.
UiPath’s Growth and Strategy
UiPath, on the other hand, is focusing on cutting costs and streamlining its operations to stabilize its margins and profits. The company’s revenue grew at a CAGR of 24% from fiscal 2021 to fiscal 2025, but its growth decelerated in fiscal 2023, fiscal 2024, and fiscal 2025. As the article notes, "UiPath is upgrading its software robots with additional AI tools to analyze the processed data." Despite the deceleration, UiPath is expected to turn profitable for the first time in fiscal 2026 and remain profitable for at least the next two years. With an enterprise value of $7.34 billion, UiPath appears to be a bargain at four and 16 times its fiscal 2026 sales and EBITDA, respectively.
Comparison and Conclusion
Both Figma and UiPath have their strengths and weaknesses, but UiPath’s rising profits and lower valuation make it the more compelling AI play in the current market. As the article concludes, "Figma and UiPath can both continue to grow over the next few years. However, UiPath’s rising profits and lower valuation make it the more compelling AI play in this frothy market." While Figma’s growth is impressive, its rising costs and shrinking margins make it a less attractive investment option. On the other hand, UiPath’s focus on cutting costs and streamlining its operations makes it a more stable and profitable investment option.
Investment Advice
Before investing in either Figma or UiPath, it’s essential to consider the current market conditions and the companies’ growth prospects. As the article advises, "Before you buy stock in Figma, consider this: The Motley Fool Stock Advisor analyst team just identified what they believe are the 10 best stocks for investors to buy now… and Figma wasn’t one of them." It’s crucial to do your research and consider multiple factors before making an investment decision. As the article quotes, "The 10 stocks that made the cut could produce monster returns in the coming years." It’s always a good idea to consult with a financial advisor and do your own research before making any investment decisions.
https://finviz.com/news/265722/better-artificial-intelligence-stock-figma-vs-uipath