FIGMA WENT FLYING TO DYING

Figma — the IPO rocket that cooled off 🚀 → 🧊

What happened: Figma (FIG) exploded on its IPO day — a historic pop — then reversed much of the gain as traders sold into the mania. TipRanks and Yahoo explain the mega-pop and the quick pullback.

Why it popped: a mix of (A) huge retail/institutional demand for new tech listings, (B) Figma’s strong brand/adoption (millions of users, heavy footprint in enterprise design), and (C) scarce IPO float that let price run up quickly.

Why it fell back: valuations got extreme in minutes — forward price-to-sales (P/S) multiples reported in the 20s–60s range depending on which slices investors used — and profit-taking followed once the hype cooled. TipRanks flagged FIG’s forward P/S and rapid reversal as classic “hype then take-profits.”

Real fundamentals (quick snapshot):

• Market cap (post-IPO peak then later): tens of billions; reports show market value near ~$39B after the initial swings.

• Revenue / users: Figma is profitable at scale? It has strong growth and enterprise stickiness; earlier reporting says millions of users and wide adoption at large companies (the FT notes 13M monthly users / wide Fortune 500 adoption). Margins are improving but investors were pricing in near-miraculous future growth.

• Valuation math that scares people: forward P/S and forward P/E expectations embedded in the IPO price required extremely high future revenue growth to justify — that’s why a small disappointment or profit-taking cascades into a big drop.

Bottom line on Figma: legit business, hugely hyped IPO, and the post-pop pullback is textbook “hot new issue” behavior — fundamentals haven’t been disproven, but the price reflected expectations that were very aggressive.

2) Stocks that currently

look overvalued

(examples + why) — these are the names analysts and data sites keep flagging. I list the overvaluation signal + a quick metric or reason. Use this as a watchlist for bubble-like signs.

Note: “Overvalued” here = market price implies very high future growth or margin improvement vs what fundamentals or conservative models imply.

1. NVIDIA (NVDA) — AI leader; P/E and forward P/E very high (Macrotrends / Yahoo show forward P/E in the 40–60× range depending on measure). Great business, but valuation depends on perpetual AI growth. If AI spending slows, multiples look stretched.

2. Tesla (TSLA) — sky-high trailing/forward P/E (~180–190×). Growth expectations baked into price; execution or demand miss would punish stock badly. Macrotrends/Yahoo numbers show extreme P/E.

3. Shopify (SHOP) — strong growth but P/S and P/E elevated vs historical comps — many analysts have raised targets but its valuations assume sustained high GMV growth. Recent analyst targets and price-target bumps show optimism that may be priced in.

4. Figma (FIG) — the IPO itself — forward P/S reportedly extremely high (TipRanks flagged forward P/S ~60 in some headlines), which drove the “surge then drop.” Short-term mania = red flag.

5. Coinbase (COIN) — high P/E / forward P/E swings tied to crypto volatility; Compass Point and other houses have trimmed targets amid trading slowdowns and regulatory risk (we covered downgrades earlier). Volatility + valuation spike = risky. (see earlier downgrade coverage).

6. Duolingo (DUOL) — big reratings on AI enthusiasm + very high P/S; if user retention or monetization slows, multiple compresses rapidly (stocks that jump 20–30% on beats can be momentum-led).

7. Palantir (PLTR) — strong revenue acceleration from contracts and AI tailwinds, but forward multiples and sentiment can become stretched; some analysts remain bullish, others warn on valuation. (earlier coverage flagged high forward valuations).

8. Some streaming/ ad-tech stocks (The Trade Desk before its crash, high-flying ad platforms) — valuations built on endless ad spend growth; tariff/ macro shocks can crush outlooks and multiples. (The Trade Desk example illustrates this: weak guide → huge selloff).

Signs of a Market Bubble — 2025 Checklist

📍 Bubble signs are not about timing the pop — they’re about spotting unsustainable conditions.

1️⃣ Extreme Valuations

✅ Present

• S&P 500 P/E ratio: ~27 vs historical avg ~15–17.

• Figma IPO: Valued at ~$40B+ at one point despite falling revenue growth — classic “priced for perfection”.

• Overvalued stocks right now:

  
  

  1. NVIDIA (NVDA) – P/E ~70, Price-to-Sales ~35.

  2. Tesla (TSLA) – P/E ~75 despite slowing deliveries.

  3. Snowflake (SNOW) – P/S ~25 with slowing growth.

  4. Shopify (SHOP) – P/S ~15 with margin pressures.

  5. CrowdStrike (CRWD) – P/S ~20, high expectations baked in.

  6. Palantir (PLTR) – P/S ~17, heavy reliance on hype cycles.

  7. Arm Holdings (ARM) – P/E ~90, IPO euphoria still lingering.

  8. Figma – IPO valuation multiples vs actual earnings show >30x sales.

  
  

2️⃣ Speculative Frenzy

✅ Present

• Crypto spikes after Trump’s “alt-assets in 401(k)” push — Dogecoin +30%, meme coin volume up.

• AI stocks skyrocketing regardless of fundamentals (small AI penny stocks up 200–400% in weeks).

• Options activity: Retail call option buying at record highs.

3️⃣ IPO & SPAC Mania

✅ Present

• Figma’s IPO — massive day-one surge, then reality check crash.

• Several new tech IPOs seeing triple-digit % pops in first trading hours.

• SPAC market cooling but still exists with risky deals.

4️⃣ Disconnect from Fundamentals

✅ Present

• Earnings growth not keeping pace with stock price appreciation.

• Companies missing guidance still rallying (sign investors are buying the story, not the results).

5️⃣ New Retail Investor Wave

✅ Present

• TikTok & Reddit finance channels hyping “get-rich-quick” plays.

• High first-time brokerage signups since 2021 meme stock boom.

6️⃣ Easy Money / Policy Tailwinds

⚠️ Developing

• Fed expected to cut rates → could extend bubble.

• Government opening up retirement accounts to more speculative assets.

7️⃣ “This Time It’s Different” Narratives

✅ Present

• AI is “going to replace everything” storyline.

• “Crypto is the new safe haven” narrative gaining traction despite volatility.

📊 Verdict:

We are already checking off 6/7 classic bubble indicators. The fundamentals vs valuations gap is widening, IPO hype is back, and speculative retail activity is high. While bubbles can inflate far longer than skeptics expect, the setup is eerily similar to late 1999 and late 2021.

In-Depth Summary: “President Trump Just Gave Stock Investors 2 Reasons to Worry…”

1. Tariff Troubles

Trump’s renewed push for increased tariffs — targeting sectors like tech, pharma, and autos — is spooking markets. Strategists warn that higher tariffs could squeeze corporate profits, hamper consumer spending, and slow economic growth. Even though some “skinny” trade deal progress has eased immediate fears, firms like Barclays expect effective tariff rates may still climb to ~15%, with risks skewed even higher. This comes as investors shift their focus back to fragile economic data.

2. Firing the BLS Commissioner

The abrupt dismissal of the Bureau of Labor Statistics (BLS) head — following weak July jobs data and downward revisions — sparked concerns about political interference in economic reporting. Trump accused the data of being skewed without evidence. This move undermines confidence in the reliability of government statistics, making investors nervous about transparency and central bank independence.

Bonus Context & Analyst Concern

• Grossly stretched valuations and elevated market optimism are fueling growing market vulnerability. Analysts like those at Morgan Stanley and Deutsche Bank caution that the S&P 500’s rapid gains could reverse if inflation or weak data surprise in the wrong direction, especially heading into historically volatile August–September months.

  
  

• Morgan Stanley’s Lisa Shalett outlines how Trump’s moves are dividing the market:

  
  

  • Consumer-oriented businesses are more exposed to tariff pain.

  • B2B and exporters are better insulated and may even benefit from tax incentives and a weaker dollar.

    
    

    Portfolio strategies now require precision in navigating these trade-offs.

    
    

Bottom Line

Between looming tariff hikes and the politicization of economic data, investors are facing real uncertainty. Confidence in both government forecasts and corporate earnings is under strain. Coupled with near-record valuations, many are urging caution — this isn’t a call to panic, but definitely a green light to tighten risk management and stay alert.