This Is Alphabet’s ‘Secret Portfolio’s’ Worst Performer and Google Is Helping Kill It

By Rich Duprey Published Feb 4, 1:53PM EST

Quick Read

Figma (FIG) trades around $21 per share after plunging 85% from its $142.92 post-IPO high.
Figma’s business faces pressure from Google’s Project Genie which auto-generates interactive 3D environments from text prompts.
Figma’s 85% decline exceeds other AI-pressured software stocks.

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This Is Alphabet’s ‘Secret Portfolio’s’ Worst Performer and Google Is Helping Kill It — © 24/7 Wall St.

Alphabet (NASDAQ:GOOG | GOOG Price Prediction)(NASDAQ:GOOGL) is hitting its stride in artificial intelligence. Its Gemini model continues to advance rapidly in capabilities and adoption. Late last month, Google launched Project Genie, an experimental world model that generates interactive, real-time 3D environments from simple text or image prompts. The release has sent shockwaves through the tech sector, particularly among software stocks. Investors worry that rapid AI progress could automate tasks currently requiring specialized design and development tools.

One company feeling the brunt is Figma (NYSE:FIG). The collaborative design platform went public last July with shares opening at $85 and quickly hit a post-IPO high of $142.92 per share. Today, the stock trades around $21 per share, representing a roughly 85% decline from its peak.

Alphabet’s secret investment portfolio bought over 215,000 shares of Figma during the third quarter, which were valued at $11.18 million at the end of the period. The position was revealed in Alphabet’s 13F-HR filing in November. Since then, Figma shares have fallen approximately 58%, turning the stake into one of Alphabet’s worst-performing public investments.

Alphabet’s “Secret” Portfolio

Alphabet’s “secret portfolio” refers to its direct holdings in public companies, separate from its main operations and venture funds like GV and CapitalG. These positions are disclosed quarterly through SEC Form 13F-HR filings, typically 45 days after the end of the quarter.

The portfolio totaled $2.41 billion at the end of Q3, making Alphabet’s $11 million position in Figma a fairly modest one. For comparison, Alphabet’s two biggest positions are am 8.94 million-share stake in AST SpaceMobile (NASDAQ:ASTS), currently valued at $912.8 million, and a 31.94 million-share stake in Planet Labs (NYSE:PL), worth almost $700 million today. Those two positions are up 69% and 110%, respectively, since the end of Q3.

Excluding two small biotech positions that have declined even more steeply into actual penny stock status, Figma ranks as the portfolio’s worst performer since the filing.

Figma’s Business and the AI Threat

Figma provides a cloud-based platform for interface design, prototyping, and real-time collaboration. It is widely used by product designers, engineers, and cross-functional teams to create user interfaces for websites, mobile apps, and software products.

Project Genie directly challenges this model. By generating navigable, interactive environments on demand, it demonstrates a future where AI could auto-create user flows, layouts, and even functional prototypes with minimal human input. If world models continue to improve, the specialized design skills and tools Figma provides could see reduced demand, particularly for standard interfaces and rapid ideation. This has intensified selling pressure on Figma stock, especially as broader software stocks face similar AI disruption fears.

Recent market moves underscore the sector-wide concern. Following SAP‘s (NYSE:SAP) underwhelming cloud outlook and ServiceNow‘s (NYSE:NOW) after-earnings drop, software names entered a technical bear market. Investors fear AI could erode demand for traditional SaaS workflows by enabling faster, cheaper automation of code, apps, and design processes.

Key Takeaway

Figma is not the only software stock under pressure. ServiceNow has lost more than half its value from its peak amid AI disruption worries. Datadog (NASDAQ:DDOG) is down around 41% from highs, and Snowflake (NYSE:SNOW) has fallen about 40%. Yet Figma’s roughly 85% drop from its early highs remains the steepest among prominent names.

While Google’s Genie project has amplified investor concerns about design tool obsolescence, Figma is also contending with high valuation expectations after its IPO, competition, and broader SaaS sector headwinds. With earnings due on Feb. 18 and ongoing AI fears, the stock faces continued volatility. While Wall Street rates the stock a hold, investors should avoid Figma even at its current levels.

About the Author Rich Duprey →

After two decades of patrolling the dark corners of suburbia as a police officer, Rich Duprey hung up his badge and gun to begin writing full time about stocks and investing. For the past 20 years he’s been cruising the markets looking for companies to lock up as long-term holdings in a portfolio while writing extensively on the broad sectors of consumer goods, technology, and industrials. Because his experience isn’t from the typical financial analyst track, Rich is able to break down complex topics into understandable and useful action points for the average investor. His writings have appeared on The Motley Fool, InvestorPlace, Yahoo! Finance, and Money Morning. He has been interviewed for both U.S. and international publications, including MarketWatch, Financial Times, Forbes, Fast Company, and USA Today.