Figma stock just crossed a crucial price: is the bull run starting?

Figma stock continued its recovery this week, reaching its highest level since March 5 this year. FIG jumped to $30.62, up by 81% from its lowest level this year, mirroring the performance of other top software companies like Salesforce, Adobe, and Palantir. 

Figma stock joins the software rally

Figma, a top player in the software industry, has come under pressure since going public last year. It dropped from a record high of $142.7 to a low of $16.80. This retreat happened as investors dumped software companies amid fears that their businesses will be disrupted by artificial intelligence tools.

Recently, however, Figma stock has rebounded as we predicted. This rebound continued on Thursday after Salesforce, a top software company, soared after its strong earnings and guidance. 

Figma’s fundamentals showed that its business was doing well and was still adding customers despite the AI fears. The most recent results showed that Figma’s revenue jumped by 48% in the second quarter to $370 million, higher than what analysts were expecting. It was also higher than what the management guided during its first quarter results. 

The company’s gross profits also jumped during the quarter. Most importantly, Figma’s number of customers continued growing and now has 15,964 customers paying $10,000 a year. 

Figma has continued to boost its business using AI tools, with 80% of paid customers using its AI credits weekly.

Analysts are optimistic that Figma’s business will continue to do well in the coming years as demand for its products rises. The average estimate is that its revenue will come in at $375 million, up by 37% from a year earlier. 

Its fourth quarter revenue is expected to grow by 27% to $388 million, bringing the annual figure to over $1.47 billion. Since going public, Figma has constantlly done better than estimates, meaning that its results will be much higher.

Analysts have started to take note, with Bank of America’s Tal Liani hiking his target from $30 to $33. He pointed out that the company may start to benefit from AI tokens and the stickiness of its platform. Citigroup has a buy rating with a target of $37, while Wells Fargo sees it rising to $36.

Figma stock price technical analysis

Figma stock chart | Source: TradingView

The daily chart shows that the FIG stock topped at $142 in August last year and then plunged to a low of $16.80. This sell-off happened amid the rising SaaSPocalypse fears.

The stock formed a large double-bottom pattern at $16.80 and a neckline at $27.80, its highest level on June 1 this year. A double-bottom is one of the most common bullish reversal signs in technical analysis.

The stock has moved above the 50-day moving average, while the Relative Strength Index (RSI) has jumoped to 67. It is hovering near its overbought level of 70.

Therefore, the stock will likely continue rising as bulls target the next key resistance level of $40, its highest point in December last year.

READ MORE: Figma stock is rising: a golden opportunity to buy at a bargain price?