Better Artificial Intelligence Stock: Figma vs. UiPath

Figma (NYSE: FIG) and UiPath (NYSE: PATH) both utilize artificial intelligence (AI) to streamline workflows and automate repetitive tasks. Figma, which develops cloud-based user interface (UI) and user experience (UX) design tools, uses AI to generate design ideas and prototypes, auto-edit content, create summaries, and output code. UiPath's software robots automate repetitive tasks, such as data entry, mass emails, and onboarding new customers.

Figma went public at $33 last July and currently trades at approximately $37. UiPath went public at $56 in April 2021, but it now trades at roughly $16. Let's see why neither of these AI stocks generated life-changing gains for their early investors -- and if either one is worth buying right now.

Image source: Getty Images.

How fast is Figma growing?

Figma's cloud-based UI and UX design tools can run natively within a web browser without requiring local installation, making them more lightweight and scalable than traditional UI/UX development tools from Adobe (NASDAQ: ADBE) and other software makers. Their cloud collaboration features also enable multiple users to simultaneously work on a single project.

Figma offers a free tier for individuals and small teams, as well as a paid tier with additional features for larger organizations. Adobe nearly acquired Figma for $20 billion in 2022, but antitrust regulators forced the company to abandon the deal. Approximately 95% of Fortune 500 companies and 78% of Forbes Global 2000 companies currently use Figma to design their applications.

In 2024, Figma's number of customers generating more than $10,000 in annual recurring revenue (ARR) increased by 45% to 10,517, and the net dollar retention rate of this high-value cohort expanded by 12 percentage points to 134%. Its total revenue increased 48% to $749 million, but it incurred a net loss of $732 million -- compared to its net profit of $738 million in 2023.

Figma is growing rapidly, but its costs are rising as it expands its newer products, including Figma Draw, Figma Sites, and its AI tools. Its margins are shrinking as it ramps up its cloud infrastructure, sales, and marketing spending. It could also cannibalize its core subscription plans with its new consumption-based fees to attract more cost-conscious customers.

From 2024 to 2027, analysts expect Figma's revenue to grow at a CAGR of 27% to $1.53 billion as it narrows its net loss from $732 million to $331 million. Its AI-powered creation and workflow tools -- as well as integrations with third-party software and international expansion -- should drive that growth. However, with an enterprise value of nearly $17 billion, Figma's stock isn't a bargain at 13 times this year's sales and 124 times its earnings before interest, taxes, depreciation, and amortization (EBITDA), and it hasn't proven its business model is sustainable.

How fast is UiPath growing?

UiPath's AI robots are plugged into an organization's existing software to automate repetitive tasks. It's the world's top robotic process automation (RPA) company, serving more than 60% of the Fortune 500 companies. Still, it faces stiff competition from newer generative AI platforms, smaller RPA companies like Automation Anywhere, and tech giants like Microsoft (NASDAQ: MSFT) -- which is integrating similar automation tools into its Copilot platform.

From fiscal 2021 to fiscal 2025 (which ended this January), UiPath's revenue rose at a robust CAGR of 24% from $608 million to $1.4 billion. However, its growth decelerated in fiscal 2023, fiscal 2024, and fiscal 2025 -- when its revenue grew a mere 9%. It attributed that deceleration to sluggish enterprise spending in a challenging macro environment, but that slowdown also coincided with the rapid growth of generative AI platforms like OpenAI's ChatGPT.

To widen its moat against competitors, UiPath is upgrading its software robots with additional AI tools to analyze the processed data. From fiscal 2025 to fiscal 2028, analysts expect its revenue to grow at a steady CAGR of 10% to $1.88 billion. They also expect it to turn profitable for the first time in fiscal 2026 and remain profitable for at least the next two years.

Instead of boldly expanding its business with new investments and acquisitions, UiPath is focusing on cutting costs and streamlining its operations to stabilize its margins and profits. While its high-growth days might be over, it could continue to dominate the niche RPA market, which Grand View Research expects to expand at a CAGR of 43.9% from 2025 to 2030.

With an enterprise value of $7.34 billion, UiPath still appears to be a bargain at four and 16 times its fiscal 2026 sales and EBITDA, respectively. Its slower growth, competitive challenges, and CEO changes are likely compressing its valuations -- but it could grow through economic booms and busts as more companies replace their human employees with its software robots.

The better buy: UiPath

Figma and UiPath can both continue to grow over the next few years. However, UiPath's rising profits and lower valuation make it the more compelling AI play in this frothy market. As for Figma, investors should consider how the company balances its growth and spending before purchasing its stock.

Leo Sun has no position in any of the stocks mentioned. The Motley Fool has positions in and recommends Adobe, Microsoft, and UiPath. The Motley Fool recommends Figma and recommends the following options: long January 2026 $395 calls on Microsoft, long January 2028 $330 calls on Adobe, short January 2026 $405 calls on Microsoft, and short January 2028 $340 calls on Adobe. The Motley Fool has a disclosure policy.