Shares of Figma Inc. demonstrated a sharp decline last month amid a broad sell-off in the software sector triggered by investor fears of competition from artificial intelligence. Additional pressure on the stock came from the launch of a competing product, Claude Design, by Anthropic, which heightened market fears regarding the vulnerability of traditional SaaS platforms.

Figma shares finished June down 29%, with the main wave of decline occurring in the first half of the month. Investors began dumping the stock en masse following disappointing quarterly reports from other major industry players, including Salesforce, Adobe, and Oracle.

The recent stabilization of the stock around the target mark of $36 occurred after Citigroup analysts initiated coverage on the shares with a “buy” rating. The bank’s channel checks showed strong demand for Figma’s AI tools and an influx of new paid subscribers, which partially offset the negative sentiment surrounding the so-called “SaaSpocalypse.”

Figma overcame a local peak of Wall Street pessimism toward the end of the month thanks to its annual Config conference. At the event, the tech company presented new features for integrating code into design layers, allowing the shares to recoup more than half of their June losses during a steady recovery in early July.