Can investing $ 10,000 in Figma make a millionaire?

• Visual Digital Design Software Platform Figma has recently become public with great – and Bullish – Fanfare.

• The post-ipo return that started before the release of his second quarterly numbers continued after their release.

• Not all this weakness can easily be rejected as the type of volatility that you can expect shortly after a public offer of a well -viewed company.

• 10 shares that we like more than Figma ›

There is certainly no shortage of hype on relatively new stock Figma (NYSE: Fig) nowadays. And understandable. This apparently simple company grows like a madman and recently reports a quarter of a year on annual improvement of 41%, with more of the same on the horizon.

Unfortunately, Hype just does not guarantee bullishness. This share has fallen more than half of the post-ipo stress height from the beginning of August, in fact, with a lot of that setback in response to what resembled healthy Q2 numbers that were posted last week.

Yet many investors insist that this weakness is a chance instead of an omen, and use the withdrawal to step into a position they ultimately expect to rise. Are they right? Could an investment of $ 10,000 in this young ticker become a million dollars or more in the near future?

First things first.

What is Figma? The correct answer to the question seems too easy to be true. Yet it is. Figma is an online collaboration platform with which several members of the same team can co-create and edit visual user interfaces for mobile apps and websites. That’s it. That’s all it does.

OK, this description demonstrably understitLood the power of the technological tool. Figma’s cloud -based software helps users to build the appearance of an interactive app or web page from the ground, to change as often as necessary and to facilitate communication between the members of a team, because any updates are made. And although it is intended for non-coders and non-engineers, a function called DEV mode (“DEV” shortly for “developer”) can convert a layout into the computer code needed to make it work in the real world. Figma also offers digital Whiteboards and slide showing templates.

In general, however, the core competence of the company simply helps organizations to easily build what their customers see when using the app or website of that organization.

The thing is, there is a clear and growing demand for such a solution. The recently reported Q2 top line from Figma grew year after year by 41% to almost $ 250 million. The company’s guidance also requires the rest of the year for the rest of the year, with most of the usually recurring income from existing customers who simply add more functions or users to their subscription. Figma is also reliable profitable (albeit only marginal, for the time being) despite his small size and fairly young age.

And yet the shares of Figma tumbled again in response to the results of the second quarter of Wednesday. Although it was only a wild gamble about how much the company should have reported in a win for the three -month piece, what was essentially a break life, clearly not good enough for most investors.

Or maybe that was not the reason for the setback.

It is a frustrating truth but it takes a while before newly beaten shares shake off all their volatility after the public. It is also worthwhile to detail that even the shares that rise in the long term in the long term, often suffer from large and sometimes long-term sale first.

An example: MetaWhen it was still called Facebook. It was all anger before and shortly after the IPO of May 2012. Three months later, however, it was almost halved by the price of his first trade as a listed issue. It would only reclaim that price more than a year later.

Rival social network outfit Bite (Parent to Snapchat) has carried out its shareholders through a similar writer who has still followed his entire course. Although this share was called red after the public offer from the end of 2020 to October 2021, shares then started somewhat in a sale of more than 80% in less than a year, so that the share remained far below the price of the first trade. Today it is still about that depressive price.

It’s not all But bad news. Artificial Intelligence Data Center Support Provider CoreWeave I got a bit of a wobbly start after the public offer of March, but eventually found his foot in April and is still much higher than then, despite a more recent break.

But what does this have to do with Figma? It is a reminder that the market does not really know how to praise – or even what to do – newly created shares. Investors naturally understand that shares are usually volatile after their first public offer. However, investors also know that in many cases it still pays off, even if the fundamental argument of that ticker does not yet contain much water.

In other words, there is really no way to tell when, where, or even when Figma will recover. It has more to do with feelings and perceptions of investors, who can be predicted fickle and impossible. It can be months, If not years, Before this ticker actually reflects the prospects of the underlying company.

Or the company can come across headwind before the shares even get the chance to do this.

But the question remains: can investing $ 10,000 in Figma today make a millionaire at a reasonable point in your life? After all, there is clearly a growing demand for the interface design cooperation software it offers.

Never say never. But probably not – just not for the reason that you might think, such as the shameful appreciation of the shares of almost 30 times his turnover. Not only income, but saleversus the average price for the sales ratio of the software in the industry of around 10.

The pure difficulty in acting shares with recent IPOs aside aside, Figma has a much bigger problem. That is, there is no real canal to talk about this. That simply means that there is little to nothing to prevent a larger and deeper rival from seeing the success that Figma enjoys his platform and replicating the idea itself. There is certainly nothing legal Prevent it from happening at least. Although processes, machinery or new creations can all be patented, only a starting point or a business idea is not protected in this way.

And don’t think a minute that would not be competitors think it over Also about this, especially now that Figma has proven that this company is profitable and is very tradable. Outfit of marketing and graphic software Climb Figma already done an acquisition offer. Although it ultimately encountered too many regulatory obstacles to be feasible, the fact that Adobe was willing to repay such a premium for Figma completely in 2023 his confidence in the marketability of Figma’s technology.

If not Adobe, maybe Microsoft Perhaps find a way to add this type of interface design platform to the line-up of cloud-based productivity and team cooperation tools. Chances are that at least most paying customers of Figma already use and use one or two Microsoft products.

You get the idea. It would not be necessary to launch a feasible alternative to Figma. If another player was previously not interested, they are certainly more likely to be interested in the aftermath of well -published growth for his simple company.

Bottom Line? Buy it if you have to. Just know what you buy. You do not invest in a growth sector with proven lasting power – at least not yet. You bet that the market will change ideas about this share in the very near future. And that is a pretty risky proposition.

Consider this before you buy stock in Figma:

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James Brumley has no position in one of the aforementioned shares. The Motley Fool has positions and recommends Adobe, Meta Platforms and Microsoft. The Motley Fool recommends the following options: Lang January 2026 $ 395 calls on Microsoft and short January 2026 $ 405 calls on Microsoft. The Motley Fool has a disclosure policy.

Can investing $ 10,000 in Figma make a millionaire? was originally published by the Motley Fool