Key Points
-
Figma maintains a dominant position in the collaborative design market with robust revenue growth.
-
Palantir Technologies demonstrates high profitability and strong free cash flow generation from its enterprise AI platforms.
-
Which of these high-growth software companies represents the better investment for your portfolio?
- 10 stocks we like better than Figma ›
Choosing between Figma (NYSE:FIG) and Palantir Technologies (NASDAQ:PLTR) requires balancing rapid expansion against proven profitability.
Figma provides collaborative design tools that have become standard for product teams globally. Palantir offers massive data-integration platforms used by governments and large corporations. While both companies are leveraging artificial intelligence to drive new growth, they offer very different financial profiles for investors looking to expand their technology holdings.
The case for Figma
Figma provides a collaborative design and product-development platform that helps teams build digital products together. The company has established a dominant position among tech stocks focused on creative collaboration, serving over 690,000 paid customers. Its business model relies on a community-driven, self-service adoption approach while increasingly scaling toward enterprise-level organizations.
In FY 2025, revenue reached nearly $1.1 billion, representing a growth of approximately 41% over the previous year. However, the company reported a net loss of roughly $1.3 billion for the same period. This resulted in a net margin of approximately -118.4%, compared to a negative margin of 97.7% in the previous fiscal year.
As of its December 2025 balance sheet, Figma reported a debt-to-equity ratio of approximately 0.1x. This ratio measures total debt, including short and long-term obligations, relative to shareholder equity. The current ratio, which compares short-term assets to liabilities, stands at roughly 2.6x. Free cash flow for the fiscal year was close to $246.2 million, which is calculated by subtracting capital expenditures from operating cash flow. Note that stock-based compensation represented roughly 544.2% of operating cash flow, meaning reported cash generation is heavily inflated by this non-cash add-back.
The case for Palantir Technologies
Palantir builds software platforms like Foundry, Apollo, and AIP to assist with operational decision-making. Its major partners include Nebius Group (NASDAQ:NBIS) and Nvidia (NASDAQ:NVDA) for artificial intelligence infrastructure. The company also works with Fujitsu (OTC:FJTSF) and SOMPO Holdings (OTC:NHOLF) to deploy technology across 50 different industry verticals.
During FY 2025, Palantir generated approximately $4.5 billion in revenue, which is a 56.2% increase year over year. The company also achieved a net income of close to $1.6 billion, resulting in a net margin of roughly 36.3%. This performance highlights a significant improvement from the previous fiscal year when the net margin was approximately 16.1%.
As of its December 2025 balance sheet, Palantir reported a debt-to-equity ratio of approximately 0.0x. Its current ratio was nearly 7.1x, suggesting a strong ability to cover short-term liabilities with liquid assets. Free cash flow for FY 2025 was close to $2.1 billion. Note that stock-based compensation represented roughly 32% of operating cash flow, which inflates reported cash generation since this is a non-cash expense added back in the cash flow statement.
Risk profile comparison
Figma faces intense competition from established players like Adobe (NASDAQ:ADBE) and other tools using artificial intelligence to automate design workflows. Recent changes to its credit-based pricing models could also lead to revenue volatility or customer dissatisfaction. Furthermore, the company relies heavily on Amazon (NASDAQ:AMZN) for its cloud infrastructure and faces potential security risks from third-party integrations.
Palantir deals with long and unpredictable sales cycles which can lead to significant quarterly volatility. The company faces competition from large software firms and Microsoft, while its heavy reliance on a few large customers adds concentration risk. Additionally, it must navigate complex regulations like the EU AI Act and maintain its cloud operations on platforms provided by Amazon.
Valuation comparison
Palantir carries a much higher valuation than Figma when comparing their Forward P/E and P/S ratio figures.
MetricFigmaPalantir TechnologiesForward P/E73.1×119.1xP/S ratio8.0x70.8x
Valuation metrics sourced from Financial Modeling Prep (FMP) and may differ from other data providers.
Which stock would I buy in 2026?
I’d go with Palantir, and it’s not a close call. Its Q2 results were among the most impressive of any software company in recent memory: Revenue nearly doubled year over year, U.S. commercial revenue surged at a pace that most software companies never reach at this scale, and the company raised its full-year outlook substantially. It is profitable, generating substantial free cash flow, and somehow still accelerating. That’s a remarkable combination.
Figma just delivered a quarter that pushed back against the narrative that AI tools would erode its dominance in design software, with revenue reaccelerating and management raising its outlook. That is an encouraging sign for a recently public company still establishing its footing. But Figma is still working toward consistent GAAP profitability, and the distance between where it is today and where Palantir already is feels massive.
Palantir is profitable, accelerating, and embedding itself deeper into the operations of customers that depend on its platform for their most critical decisions. The valuation already reflects a lot of that optimism, which means the margin for error is thin. But for a patient investor who believes the AI software opportunity is as large as Palantir’s results suggest, it is still a compelling place to put your money.
Should you buy stock in Figma right now?
Before you buy stock in Figma, consider this:
The Motley Fool Stock Advisor analyst team just identified what they believe are the 10 best stocks for investors to buy now… and Figma wasn’t one of them. The 10 stocks that made the cut could produce monster returns in the coming years.
Consider when Netflix made this list on December 17, 2004… if you invested $1,000 at the time of our recommendation, you’d have $383,680!* Or when Nvidia made this list on April 15, 2005… if you invested $1,000 at the time of our recommendation, you’d have $1,382,954!*
Now, it’s worth noting Stock Advisor’s total average return is 937% — a market-crushing outperformance compared to 214% for the S&P 500. Don’t miss the latest top 10 list, available with Stock Advisor, and join an investing community built by individual investors for individual investors.
See the 10 stocks »
*Stock Advisor returns as of September 26, 2026.
Sara Appino has positions in Amazon, Nvidia, and Palantir Technologies. The Motley Fool has positions in and recommends Adobe, Amazon, Figma, Nvidia, and Palantir Technologies. The Motley Fool recommends the following options: long January 2028 $330 calls on Adobe and short January 2028 $340 calls on Adobe. The Motley Fool has a disclosure policy.
