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Why Did Figma Stock Soar 17.4% Today?
Key Points
OpenAI CEO Sam Altman said that Figma will be integrated into ChatGPT.
Users will be able to use Figma's artificial intelligence (AI) tools directly within a ChatGPT conversation.
Shares of Figma (NYSE: FIG) jumped on Wednesday, finishing the day up 17.4%. The move came as the S&P 500 (SNPINDEX: ^GSPC) gained 0.6%, and the Nasdaq Composite (NASDAQINDEX: ^IXIC) gained 1.1%.
Figma, an artificial intelligence (AI)-focused design platform, is seeing its shares continue to gain after OpenAI chief Sam Altman took to the stage earlier in the week at the company's DevDay conference to discuss a new ChatGPT integration with Figma.
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Figma's ChatGPT integration
Altman explained the integration on Monday, saying that users will "be able to find an app by asking for it by name. For example, you could sketch out a product flow for ChatGPT and then say, Figma, turn this sketch into a workable diagram. The Figma app will take over, respond, and complete the action."
Image source: Getty Images.
Naming Figma directly sent shares soaring on hopes that Figma could massively expand its user base -- OpenAI says that about 800 million people use ChatGPT today. Investors are optimistic about what this could mean for the relationship between ChatGPT and other software platforms, as many fear ChatGPT's growth will cannibalize the use of other platforms. The momentum from Monday carried into Tuesday and Wednesday trading.
Despite what could be a mutually beneficial relationship with OpenAI, I think Figma's valuation is stretched, and I would avoid the stock.
Johnny Rice has no position in any of the stocks mentioned. The Motley Fool has no position in any of the stocks mentioned. The Motley Fool has a disclosure policy.