Unity Software Could Be a Bargain Amid AI Fears
Written by Emily J. Thompson, Senior Investment Analyst
Updated: Mar 13 2026
0mins
Should l Buy U?
Source: NASDAQ.COM
- Market Panic Impact: Unity Software's stock has been pressured due to widespread investor fears that AI will disrupt the software industry, reflecting market concerns despite its solid fundamentals.
- Investment Recommendation Absence: Although Unity Software did not make the Motley Fool Stock Advisor's list of the top 10 stocks, analysts believe it still holds potential investment value and could rebound in the future.
- Historical Return Comparison: The current investment opportunity in Unity Software may offer similar high return potential as seen with Netflix in 2004 and Nvidia in 2005, especially as the market recovers.
- Investor Community Support: By joining the Motley Fool's investing community, investors can access the latest investment advice and market analysis, and while Unity is not on the recommended list, it remains a stock worth watching.
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Analyst Views on U
Wall Street analysts forecast U stock price to rise
20 Analyst Rating
13 Buy
6 Hold
1 Sell
Moderate Buy
Current: 21.960
Low
21.00
Averages
48.71
High
60.00
Current: 21.960
Low
21.00
Averages
48.71
High
60.00
About U
Unity Software Inc. provides a platform for creating and growing games and interactive experiences. The Company offers a suite of tools across all platforms, from mobile, PC, and console, to extended reality (XR). Its set of software, including artificial intelligence (AI) solutions, supports creators through the entire development lifecycle. The Company’s platform consists of two complementary sets of solutions: Create Solutions and Grow Solutions. Create Solutions is a robust set of tools and services used to build, ship and run high-definition, real-time two-dimensional (2D) and three-dimensional (3D) content. Designed for developers, these tools and services are used across a range of industries, ranging from games to aerospace, construction to retail, medical to manufacturing, and others. Grow Solutions offers customers the ability to engage their user base and monetize their content from 2D puzzle games to multiplayer, multi-platform games, or other 3D interactive content.
About the author
Emily J. Thompson
Emily J. Thompson, a Chartered Financial Analyst (CFA) with 12 years in investment research, graduated with honors from the Wharton School. Specializing in industrial and technology stocks, she provides in-depth analysis for Intellectia’s earnings and market brief reports.
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- Identity-Driven Strategies: By leveraging RampID, marketers can implement identity-based buying strategies within Unity's mobile ecosystem, facilitating omnichannel marketing that increases brand visibility and user engagement in gaming.
- Market Demand Response: LiveRamp's SVP Matthew Hogg emphasizes that this partnership allows marketers to activate across channels more quickly and seamlessly, particularly in gaming, addressing the urgent market demand for identity activation.
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- Adjusted EBITDA Growth: The company expects adjusted EBITDA to range from $130 million to $135 million, up from the earlier estimate of $105 million to $110 million, indicating a significant improvement in profitability.
- Strategic Business Shift: Unity is embarking on a growth initiative that includes exiting the ironSource Ads Network and Supersonic game publishing, with expectations that these changes will accelerate revenue growth and enhance adjusted EBITDA margins.
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- Strong Profit Outlook: Adjusted EBITDA is anticipated to be between $130 million and $135 million, compared to previous guidance of $105 million to $110 million, reflecting significant progress in cost control and operational efficiency.
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- Sale of China Division: Unity plans to sell its China division for over $1 billion to mitigate geopolitical risks and concentrate on its core business, a move that will help optimize resource allocation and strengthen its competitive position in the market.
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- Surge in Trading Volume: Today's trading volume reached 51.5 million shares, over 200% above the three-month average of 16.8 million shares, indicating a significant increase in market interest in Unity Software, potentially attracting more investors.
- Strategic Restructuring Impact: Unity Software is streamlining operations by shutting down its ironSource Ads Network and selling its Supersonic games division, which may help improve overall efficiency and profitability, thereby enhancing its competitive position in the market.
- Analyst Price Target Increases: Both Bank of America and Morgan Stanley have raised their price targets for Unity Software, reflecting optimistic market expectations for its future growth potential, with investors closely watching AI developments and Q2 guidance to assess the sustainability of this growth.
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- Oil Price Surge: WTI crude oil prices surged over 5% due to fears surrounding the Iran conflict, which not only exacerbates inflation expectations but may also compel the Federal Reserve to tighten monetary policy, impacting overall economic growth.
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LiveRamp Expands Partnership with Unity to Enhance Marketing Effectiveness
- Partnership Expansion: LiveRamp's expanded partnership with Unity makes the durable, interoperable identifier RampID available on Unity Exchange, expected to enhance marketers' effectiveness across 2.9 billion active mobile devices globally.
- Identity-Driven Strategies: By leveraging RampID, marketers can implement identity-based buying strategies within Unity's mobile ecosystem, facilitating omnichannel marketing that increases brand visibility and user engagement in gaming.
- Market Demand Response: LiveRamp's SVP Matthew Hogg emphasizes that this partnership allows marketers to activate across channels more quickly and seamlessly, particularly in gaming, addressing the urgent market demand for identity activation.
- Future of Data Collaboration: LiveRamp is committed to shaping responsible data collaboration globally, and as consumers embrace AI-driven experiences, its data network will further enhance the breadth and accuracy of marketing AI capabilities.
See More
A Hectic Week for Video Games: Watch These Stocks Closely.
- Market Uncertainty: The videogame industry is facing increasing uncertainty, prompting investors to reassess potential long-term stock opportunities.
- Investor Insights: Recent news provides insights for investors on which stocks may be attractive as the industry evolves.
- Growth Potential: Despite short-term challenges, the overall growth potential of the videogame sector remains a focal point for investment strategies.
- Stock Evaluation: Investors are encouraged to evaluate stocks based on the latest industry developments and trends.
See More
Unity Software Raises Revenue Outlook, Stock Surges
- Revenue Outlook Upgrade: Unity Software has raised its Q1 2023 revenue forecast to between $505 million and $508 million, reflecting a 3.7% to 5.2% increase from the previous target of $480 million to $490 million, driven by strong performance from its Vector business.
- Adjusted EBITDA Growth: The company expects adjusted EBITDA to range from $130 million to $135 million, up from the earlier estimate of $105 million to $110 million, indicating a significant improvement in profitability.
- Strategic Business Shift: Unity is embarking on a growth initiative that includes exiting the ironSource Ads Network and Supersonic game publishing, with expectations that these changes will accelerate revenue growth and enhance adjusted EBITDA margins.
- CEO's Positive Outlook: CEO Matt Bromberg stated that the robust growth of the Vector business will meaningfully enhance both revenue and profitability, underscoring the company's strengthening competitive position in the market.
See More
Unity's Q1 Results Exceed Expectations, Shares Surge
- Earnings Beat: Unity expects Q1 2026 revenue between $505 million and $508 million, significantly exceeding the prior forecast of $480 million to $490 million, indicating robust market demand and growth potential.
- Strong Profit Outlook: Adjusted EBITDA is anticipated to be between $130 million and $135 million, compared to previous guidance of $105 million to $110 million, reflecting significant progress in cost control and operational efficiency.
- Strategic Restructuring: The company has decided to shut down its ironSource Ads Network and has engaged a financial advisor to explore the sale of its Supersonic game publishing business, aiming to focus on its core game engine and advertising operations to enhance overall efficiency.
- Sale of China Division: Unity plans to sell its China division for over $1 billion to mitigate geopolitical risks and concentrate on its core business, a move that will help optimize resource allocation and strengthen its competitive position in the market.
See More
Unity Software Shares Surge 13.57% on Q1 Revenue Guidance Beat
- Revenue Guidance Beat: Unity Software projects Q1 2026 revenue between $505 million and $508 million, significantly up from the previous range of $480 million to $490 million, indicating strong growth driven by its AI ad platform, Unity Vector, which may enhance investor confidence.
- Surge in Trading Volume: Today's trading volume reached 51.5 million shares, over 200% above the three-month average of 16.8 million shares, indicating a significant increase in market interest in Unity Software, potentially attracting more investors.
- Strategic Restructuring Impact: Unity Software is streamlining operations by shutting down its ironSource Ads Network and selling its Supersonic games division, which may help improve overall efficiency and profitability, thereby enhancing its competitive position in the market.
- Analyst Price Target Increases: Both Bank of America and Morgan Stanley have raised their price targets for Unity Software, reflecting optimistic market expectations for its future growth potential, with investors closely watching AI developments and Q2 guidance to assess the sustainability of this growth.
See More
US Stocks Plunge as Oil Prices Surge Amid Iran Conflict
- Market Decline: The S&P 500 index fell by 1.67%, marking a 7-month low, while the Nasdaq 100 and Dow Jones Industrial Average dropped by 1.93% and 1.73%, respectively, indicating heightened concerns over economic slowdown.
- Oil Price Surge: WTI crude oil prices surged over 5% due to fears surrounding the Iran conflict, which not only exacerbates inflation expectations but may also compel the Federal Reserve to tighten monetary policy, impacting overall economic growth.
- Consumer Sentiment Drop: The University of Michigan's consumer sentiment index was revised down to 53.3 from 55.5, below the expected 54.0, reflecting a pessimistic outlook among consumers regarding future economic conditions, potentially suppressing consumer spending.
- Escalating US-China Trade Tensions: China launched investigations into US trade practices targeting restrictions on Chinese goods, which could further disrupt global supply chains and increase market uncertainty.
See More
