Figma (FIG) shares tumbled 16.80% in after-hours trading on Wednesday, erasing recent gains as investors locked in profits following a strong pre-earnings rally and expressed concerns over the company's AI investment margins.

The design software company reported second-quarter results that surpassed analyst expectations, with adjusted earnings per share of $0.08 doubling the consensus estimate of $0.04 and revenue of $370.1 million beating the $351.6 million forecast. Figma also raised its full-year revenue guidance to $1.463–$1.467 billion, implying approximately 39% growth, ahead of prior projections. However, the stock had already surged 5.63% on Monday and 5.14% on Tuesday, driven by AI sector momentum and bullish sentiment ahead of the report, prompting a sell-the-news reaction.

Additionally, the company kept its annual profit forecast unchanged, which fueled investor anxiety that rising investments in AI could pressure profit margins. While Figma's AI monetization efforts are gaining traction—with over half of its larger paid customers using the Figma agent weekly—the unchanged profit outlook tempered enthusiasm and contributed to the sharp after-hours decline.