Figma vs. ServiceNow: Which Technology Stock Is a Better Buy in 2026?

Choosing between a high-growth disruptor and an established enterprise titan is a classic investor dilemma. Is Figma (NYSE:FIG) or ServiceNow (NYSE:NOW) the better buy for your portfolio today?

Figma provides a collaborative design canvas that connects designers and developers, while ServiceNow offers an AI-powered platform to automate complex workflows across massive organizations. Investors often compare them as leaders in the software space, weighing Figma's hyper-growth against ServiceNow's proven profitability and massive enterprise reach.

The case for Figma

Figma operates a collaborative design platform that serves as a digital canvas for teams to build web and app products. The company is a prominent name among tech stocks and reported approximately 690,000 paid customers as of March 2026. Its strategy focuses on bridging the gap between design and development through new tools like Dev Mode and a suite of AI-enabled features including Figma Make and Figma Weave.

In FY 2025, revenue reached nearly $1.1 billion, representing growth of approximately 41% compared to the previous year. Despite this rapid top-line expansion, the company reported a net loss of roughly $1.3 billion for the period. This reflects a net margin of negative 118.4%, indicating that the business continues to prioritize expansion and product development over immediate profitability.

As of its December 2025 balance sheet, the debt-to-equity ratio was approximately 0.1x, which measures financial leverage by comparing total debt to shareholder equity. The current ratio, which measures the ability to cover short-term debts with short-term assets, was roughly 2.6x. Free cash flow for FY 2025 reached nearly $246.2 million, though stock-based compensation represented roughly 544.2% of operating cash flow, meaning reported cash generation is heavily inflated by this non-cash add-back.

The case for ServiceNow

ServiceNow provides an AI platform designed to orchestrate workflows and automate business processes across departments like IT, HR, and finance. It serves roughly 8,700 enterprise customers, including 658 clients with over $5 million in annual contract value as of mid-2026. The company also leverages a vast ecosystem of partners, including Accenture (NYSE:ACN), Microsoft (NASDAQ:MSFT), and Nvidia (NASDAQ:NVDA), to help clients implement its technology.

In FY 2025, revenue reached nearly $13.3 billion, a growth rate of approximately 20.9% over the prior year. The company is solidly profitable, reporting net income of roughly $1.7 billion for the same period. This resulted in a net margin of approximately 13.2%, demonstrating an ability to generate consistent bottom-line results even while growing at a double-digit pace.

As of its December 2025 balance sheet, the debt-to-equity ratio was approximately 0.2x, which compares total debt to shareholder equity. The current ratio stood at roughly 1.0x, representing its ability to pay short-term obligations with short-term assets. Free cash flow for FY 2025 reached nearly $4.6 billion, though stock-based compensation represented roughly 35.9% of operating cash flow, which inflates reported cash generation since SBC is a non-cash expense added back in the cash flow statement.

Risk profile comparison

Figma faces significant risks related to its heavy investment in generative AI, which has introduced volatility to its gross margin and unpredictable infrastructure costs. The company must also navigate intense competition from established technology giants and smaller AI-driven tools that could undercut its pricing or offer better integration. Furthermore, the platform handles sensitive user content, making any potential cybersecurity breach or failure in data protection a major reputational and legal threat.

ServiceNow operates in a rapidly evolving market where any failure to keep pace with AI innovations could harm its competitive standing against rivals like Salesforce (NYSE:CRM) or Oracle (NYSE:ORCL). The company also pursues an aggressive acquisition strategy, which carries risks of integration challenges or unexpected liabilities. Additionally, its reliance on mission-critical data means any service outages or security breaches could lead to significant liability and loss of customer trust.

Valuation comparison

ServiceNow is cheaper by Forward P/E, while Figma leads on P/S ratio, measuring value against sales over the past twelve months.

Valuation metrics sourced from Financial Modeling Prep (FMP) and may differ from other data providers.

Which stock would I buy in 2026?

I'd go with ServiceNow. Its subscription revenue continues to grow at a steady pace, but the more interesting story is why. ServiceNow sits at the center of how large enterprises run their internal operations, amid the workflows that connect IT, HR, finance, and customer service. Once a company has built around that platform, the cost of leaving is enormous. AI is now extending that advantage further, with enterprises turning to ServiceNow to govern and connect their AI agent deployments in ways that deepen the relationship even more.

Figma is doing something worth paying attention to. Revenue growth reaccelerated to 46% in its most recent quarter and the company raised its full-year outlook. Fears that AI would erode its design software dominance are looking increasingly overblown. The stock has fallen sharply from its IPO highs, which makes the entry point more interesting than it was a year ago.

That said, Figma is still a recently public, pre-GAAP-profitable company finding its footing as a public business. ServiceNow has years of enterprise trust and expanding profitability behind it. That track record is the more reliable foundation right now.

Sara Appino has positions in Nvidia. The Motley Fool has positions in and recommends Accenture Plc, Figma, Microsoft, Nvidia, Oracle, Salesforce, and ServiceNow. The Motley Fool recommends the following options: long January 2028 $260 calls on Accenture Plc and short January 2028 $280 calls on Accenture Plc. The Motley Fool has a disclosure policy.