Figma stock falls after Google Labs updates Stitch design tool

Investing.com -- Figma (NYSE: FIGM) shares fell 8.8% Wednesday after Google Labs announced updates to Stitch, its AI-powered design tool that converts natural language descriptions into user interface designs.

The updated Stitch allows users to create high-fidelity UI designs from text descriptions without starting with traditional wireframes. Users can input business objectives or describe desired user experiences to generate design concepts, potentially competing with Figma's core design platform offerings.

Google Labs introduced an AI-native infinite canvas that accommodates various input types including images, text, and code. A new design agent can analyze entire project histories and track multiple design directions simultaneously through an Agent manager feature.

The platform now includes interactive prototyping capabilities that convert static designs into clickable prototypes. Users can connect screens and preview app flows through a "Play" button feature, with the system automatically generating subsequent screens based on user interactions.

Google Labs expanded the design system functionality with DESIGN.md, a markdown file format that enables users to extract design systems from URLs or transfer design rules between projects and external tools.

New voice capabilities allow users to speak commands directly to the canvas for real-time design modifications. The platform supports requests such as generating multiple menu variations or displaying screens in different color schemes.

Stitch integrates with external development tools through a Model Context Protocol server and software development kit. Users can export designs to platforms including AI Studio and Antigravity for developer handoff.

"AI can be a creativity multiplier, helping people explore many ideas quickly," said Josh Woodward, VP of Google Labs.

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