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AI-based design tool firm Figma's shares popped by a whopping 227% after their listing today in another hot AI IPO in 2025. Figma operates a web platform that enables developers to leverage AI to create user interfaces and save development time. However, CNBC's Jim Cramer believes that the firm's valuation is too high to make it one of the most expensive stocks on the market.
Be Wary Of Buying Figma's Shares, Says Jim Cramer
In a series of posts made on X, Cramer pointed out that Figma was trading at 50 times its sales as the shares started to trade on the New York Stock Exchange. The firm's trailing twelve-month revenue sits at $821 million while its current market valuation is $44 billion, for an approximate 53.5x revenue to value ratio. For Cramer, this valuation is a bit too high, as he reminded his followers that if they were "putting in a market order from Figma," they "should pull it now," as a lower price was possible.
Cramer then pointed out that the "history of paying up like this is not very good." One recent IPO that shocked investors with its valuation is the listing of Circle Internet Group. Its shares have gained 121% since being listed in June, but are nevertheless down by 29% since their peak, a little over three weeks after the IPO, as extreme valuation led to a lot of selling and investors were spooked by stablecoin legislation initially missing its mark in the House.
Investor bullishness for Figma is natural given that the firm counts some of the largest technology companies in the world as its customers. Its customer list includes the likes of Google and Netflix, along with government agencies such as the IRS and the Department of Education. Figma priced its IPO at $33, which was $1 above the expected range. However, the shares jumped by 227% after they started trading, with the first trade valuing the firm at $85 for a $50 billion valuation.
Cramer also mentioned Figma's growth rate, as he believes it is too low to justify the skyrocketing share price. Figma disclosed a 40% annual revenue growth rate as part of its IPO filings and revenue for the second quarter ranging between $247 million and $250 million.
He admitted that while it was natural for people to get "too excited" and pay exhorbitant prices for the shares, Figma was still "way too expensive,assuming 40% growth rate" and a 54x revenue ratio. He added that the valuation made it appear as if the firm was the second most expensive stock in the market, coming second only to data analytics firm Palantir.
Palantir's shares have gained 109% year-to-date and trade at an unbelievable 689x price-to-earnings ratio. The CNBC TV host wants "Figma to be an outlier," as he grows concerned about high market valuations that might draw investors only to have them lose money later on.
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