Figma (NYSE:FIGM) shares fell 8.8% following significant updates to Google Labs' AI-powered design tool, Stitch. The platform now generates high-fidelity user interface designs directly from text descriptions.
Stitch features an AI-native infinite canvas and a design agent capable of analyzing project histories. The update also introduces interactive prototyping capabilities to the platform.
Investors sold shares amid concerns that Google's AI advancements could disrupt Figma's market position. The enhanced capabilities of Stitch position Google as a direct competitor to Figma's core product offerings.