The current enthusiasm for Artificial Intelligence, like most enthusiasms, has begun to cool. A predictable correction has occurred in the valuations of companies promising to harness its power, and with it, a degree of panic. This is not necessarily a moment for alarm, but one for careful assessment. The market, as always, overreacts. It is in these periods of indiscriminate selling that opportunities, however limited, present themselves. We will examine three software companies – Figma, Uber Technologies, and The Trade Desk – which have suffered from this recent downturn, and consider whether their current valuations warrant a closer look.
1. Figma
Figma, a collaborative design tool, has experienced the familiar trajectory of a promising start-up: initial exuberance followed by a sobering encounter with reality. The failed merger with Adobe, and the subsequent IPO, were events fueled more by speculation than substance. The company’s core product – a platform for designing interfaces – remains useful, and its collaborative features are genuinely advantageous. However, the notion that it is somehow immune to the pressures of automation is naive. While AI may not entirely replace Figma, it will undoubtedly erode its pricing power. The introduction of a scaled-down, free version powered by AI is not a defensive measure, but an acknowledgment of the shifting landscape.
The 2025 results, while showing revenue growth of 41% to $1.06 billion, also reveal a substantial net loss of $1.25 billion. This is not a temporary setback, but a structural problem. The company is spending heavily to acquire customers, and it remains to be seen whether it can ever achieve sustainable profitability. The projection of $33 billion in annual revenue is, frankly, optimistic. While the price-to-sales ratio of 15 may appear attractive, it is a precarious metric when applied to a company that is consistently losing money. A cautious approach is warranted.
2. Uber Technologies
Uber, a name synonymous with the disruption of the transportation industry, finds itself in a similarly ambiguous position. The company’s platform, connecting passengers and drivers, is undeniably valuable. However, its long-term prospects are inextricably linked to the development of autonomous vehicles. The question is not whether self-driving cars will become a reality, but who will control the infrastructure. Uber’s attempts to position itself as a key player in this space are commendable, but the risk remains that it will be relegated to the role of a mere service provider, subject to the whims of larger, more powerful companies.
The 2025 results – a 20% increase in trips and an 18% rise in revenue to $52 billion – are encouraging, but they do not address the fundamental uncertainty surrounding the company’s future. The doubling of operating income is a positive sign, but it is unlikely to be sustained if Uber is forced to compete with autonomous vehicle platforms that bypass its infrastructure. The forward P/E ratio of 22 suggests that the market has already priced in some of these risks, but a degree of skepticism is still advisable.
3. The Trade Desk
The Trade Desk, a company specializing in programmatic advertising, has suffered a particularly sharp decline in recent months. The missed revenue estimate in the fourth quarter of 2024, coupled with the botched rollout of its AI-driven Kokai platform, triggered a wave of selling. The increasing dominance of walled gardens – advertising platforms controlled by companies like Alphabet and Amazon – further exacerbated the situation. It is a familiar story: a promising technology company struggling to compete with established giants.
The reported discussions with OpenAI regarding advertising on ChatGPT are a welcome development, but they are not a panacea. Such partnerships may provide a temporary boost, but they do not address the underlying challenges facing the company. The continued growth in revenue – a 18% increase to $2.9 billion in 2025 – is commendable, but it is unlikely to be sustained if The Trade Desk is unable to compete effectively with the walled gardens. The forward P/E ratio of 14 may make the stock appear attractive, but it is a deceptive metric when applied to a company facing such significant headwinds. Prudence dictates a cautious approach.
In conclusion, while these three companies may offer some potential upside, they are not without risk. The current market conditions favor companies with strong balance sheets, sustainable profitability, and a clear competitive advantage. These qualities are, at present, somewhat lacking in all three cases. Investors should proceed with caution, and avoid succumbing to the allure of speculative gains.
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2026-03-13 18:03