Investing.com -- Bank of America reinstated coverage of Figma with a Buy rating and a $30 price target on Tuesday, arguing that fears over generative AI disrupting the design software company have been overdone and that the stock's 85% decline from its 52-week high presents an attractive entry point.

Analyst Tal Liani said the firm takes "a more constructive view" on AI's impact, believing it is "more likely a tailwind, not a headwind" for Figma.

While AI can accelerate initial content creation, Liani argued it could also increase the number of individuals building digital products, "leading to greater workflow complexity" and reinforcing demand for a centralized collaboration platform.

Bank of America pointed to early evidence that AI is already driving growth. In the first quarter of 2026, 75% of enterprise customers purchased additional AI credits after exceeding their initial usage limits, which the firm said highlights "strong engagement and willingness to spend."

Enterprise momentum remains robust, with customers generating more than $100,000 in annual recurring revenue, increasing 48% year-on-year, while net dollar retention stands at 139% and paid-user growth at 54%.

On valuation, Liani said Figma currently trades at approximately 5 times calendar year 2027 EV/Sales, below the peer average of 5.9 times, despite what Bank of America described as a superior growth profile.

The firm's $30 price target is based on 8 times CY27 EV/Sales. Bank of America models operating and free cash flow margins expanding from 9.2% and 11.3% in fiscal 2026 to 13.8% and 16.2% by fiscal 2028.