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’s traditional design software, while UiPath’s software robots automate tasks such as data entry and onboarding new customers.
- Figma’s revenue is growing rapidly, but its costs are rising, and its margins are shrinking, while UiPath’s growth has decelerated, but it is expected to turn profitable in the near future.
- UiPath’s lower valuation and rising profits make it a more compelling AI play in the current market.
Introduction to Figma and UiPath
Figma and UiPath are two companies that are utilizing artificial intelligence (AI) to revolutionize the way businesses operate. Figma, which went public in July 2022, develops cloud-based user interface (UI) and user experience (UX) design tools that use AI to generate design ideas and prototypes, auto-edit content, create summaries, and output code. On the other hand, UiPath, which went public in April 2021, uses AI-powered software robots to automate repetitive tasks such as data entry, mass emails, and onboarding new customers. As the article notes, "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’s growth has been impressive, with its revenue increasing by 48% to $749 million in 2024. The company’s customer base is also expanding, with approximately 95% of Fortune 500 companies and 78% of Forbes Global 2000 companies using its design tools. However, Figma’s costs are rising as it expands its newer products, including Figma Draw, Figma Sites, and its AI tools. The company’s margins are also shrinking as it ramps up its cloud infrastructure, sales, and marketing spending. As the article states, "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." Furthermore, Figma’s enterprise value of nearly $17 billion makes its stock seem overvalued, trading at 13 times this year’s sales and 124 times its earnings before interest, taxes, depreciation, and amortization (EBITDA).
UiPath’s Growth and Competitive Landscape
UiPath, on the other hand, has seen its growth decelerate in recent years, with its revenue growing by only 9% in fiscal 2025. The company faces stiff competition from newer generative AI platforms, smaller RPA companies like Automation Anywhere, and tech giants like Microsoft, which is integrating similar automation tools into its Copilot platform. However, UiPath is upgrading its software robots with additional AI tools to analyze the processed data, which should help it maintain its market share. As the article notes, "UiPath’s AI robots are plugged into an organization’s existing software to automate repetitive tasks. It’s the world’s top robotic process automation (RPA) company, serving more than 60% of the Fortune 500 companies." From fiscal 2025 to fiscal 2028, analysts expect UiPath’s revenue to grow at a steady CAGR of 10% to $1.88 billion, and the company is expected to turn profitable for the first time in fiscal 2026.
Comparison and Conclusion
While both Figma and UiPath have their strengths and weaknesses, UiPath’s lower valuation and rising profits make it a more compelling AI play in the current market. Figma’s rapid growth and expanding customer base are impressive, but its rising costs and shrinking margins are concerns. As the article concludes, "UiPath’s rising profits and lower valuation make it the more compelling AI play in this frothy market. As for Figma, investors should consider how the company balances its growth and spending before purchasing its stock." 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. Ultimately, investors should carefully consider the pros and cons of each company before making a decision.
https://www.nasdaq.com/articles/better-artificial-intelligence-stock-figma-vs-uipath