Figma became the hottest US stock last week after clinching an IPO debut gain of ~250 percent. Today, however, the high-flying stock's fortunes seem to have reversed in favor of Palantir, which is all set to announce its latest quarterly earnings after the close of today's regular trading session.
For the benefit of those who might not be aware, Figma is a San Francisco-based software UI design company that confidentially filed for an initial public offering (IPO) in April 2025, following the collapse of a $20 billion acquisition deal with Adobe in December 2023 due to regulatory challenges.
In its IPO filing, Figma reported $749 million in revenue for 2024, a 48 percent increase from the previous year, and $228 million in revenue for Q1 2025, up 46 percent year-over-year.
As we noted in a dedicated post last week, Figma's IPO was priced at $33 per share, allowing it to raise over $1.2 billion, and valuing the company at approximately $19.3 billion. On its first trading day, shares surged by 250 percent to $115.50, elevating the company's market capitalization to nearly $70 billion.
On the other hand, Palantir is an AI-powered Software-as-a-Service (SaaS) provider that allows companies and government agencies to gather and analyze tons of raw data. Palantir currently has two specialized platforms, with Gotham geared towards the data analytics needs of various government agencies, and Foundry enabling the agglomeration and analysis of data for enterprises. Palantir has also developed its bespoke Artificial Intelligence Platform (AIP), which integrates various LLMs and other types of generative AI within an organization's operational structure via AI-powered applications and agents.
This brings us to the core of today's topic. After last week's bristling rally, Figma shares are currently down around 20 percent in early trading.
On the other hand, Palantir shares are up just around 3 percent ahead of today's quarterly earnings release.
This situation has now prompted Jim Cramer, an erstwhile bastion of free alpha for a veritable army of retail traders, to quip that investors might be trying to prop up their Palantir holdings ahead of today's critical event by liquidating some of their scorching gains on Figma. This line of reasoning assumes an overlap between Figma and Palantir within a vast array of portfolios, which might not be a too far-fetched assumption, especially given the AI-based, Software-as-a-Service (SaaS) roots of these two companies.
Of course, Palantir will have to deliver a pristine result today to eke out further gains, especially in light of its eye-watering valuation. As per a Bloomberg estimation, Figma's P/S ratio stood at 56.7x as of the 01st of August, while Palantir's stood at a whopping 87.1x.
Palantir investors would be keen to scrutinize the company's deal flow cadence later today, especially as the U.S. Army recently consolidated its multiple contracts with Alex Karp's AI powerhouse into a single agreement, enabling potential purchases of up to $10 billion in products and services over the next decade.
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