Cathie Wood’s Ark Invest bought more than $10 million worth of Figma stock yesterday.
Software stocks were recovering broadly after a brutal sell-off yesterday.
Shares of Figma (NYSE: FIG) were moving higher today, in line with a broader recovery in software stocks and as Cathie Wood’s ARK made a large purchase of the stock yesterday.
As a result, Figma stock was up 9.2% as of 12:53 p.m. ET.
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Figma stock tumbled yesterday as it was one of several software stocks to fall, apparently in response to a dystopian blog post from Citrini Research that spelled out a scenario where AI dramatically disrupts the software sector and the overall economy in the next two years.
Today, however, investors seemed to look past that as the iShares Expanded Tech-Software ETF, which tracks many of the top software stocks, was up 1.6% in afternoon trading.
Additionally, two of Cathie Wood’s funds added to their positions in Figma, together buying $11.7 million worth of the design software stock, or roughly 477,400 shares.
Wood doesn’t carry the same clout she did during the height of the pandemic when her funds were soaring, but investors still pay attention to her moves, and it’s an endorsement of Figma and its current price that Ark is buying right now.
Figma is coming off a strong fourth-quarter earnings report, which lifted the stock, but the gains were squandered in Monday’s sell-off.
Figma reported 40% revenue growth to $303.8 million in the quarter, and said net dollar retention rate improved to 136%, showing existing customers are rapidly increasing their spend on the product.
Due to its focus on design software, investors see it as a potential victim of AI disruption, though there’s no evidence of that so far. If Figma can keep up its momentum, the stock looks like a good candidate for a recovery.
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Jeremy Bowman has positions in Figma. The Motley Fool has positions in and recommends Figma. The Motley Fool has a disclosure policy.
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