Unity Software Inc. (U): A Bull Case Theory

We came across a bullish thesis on Unity Software Inc. (U) on Twitter by Sigma Zero Capital. In this article, we will summarize the bulls’ thesis on U. Unity Software Inc. (U)’s share was trading at $21.55 as of March 21^st.

An office of software engineers and designers collaborating on a digital project.

Unity (U) stands as a category leader in real-time 3D content creation, now executing a much-needed turnaround after years of mismanagement and shareholder value destruction. Despite recent struggles, its core product remains highly sticky, with deep market penetration across gaming and beyond. The turnaround, though gradual, is set to gain traction by 2026, supported by a transformative new ad model that leverages Unity’s core engine data to tap into a $200-300 billion TAM, implying massive monetization potential even at a modest take rate. Positive Unity 6 feedback signals strong product cycle momentum, while price increases and cost-cutting measures, including layoffs, will drive profitability. The most crucial factor in this transformation is the new leadership under Matt Bromberg, whose strategic direction is a stark improvement over past management. With these shifts in motion, Unity presents a compelling long-term investment, positioned for significant value creation as execution improves.

Unity Software Inc. (U) is not on our list of the 30 Most Popular Stocks Among Hedge Funds. As per our database, 48 hedge fund portfolios held U at the end of the fourth quarter which was 35 in the previous quarter. While we acknowledge the risk and potential of U as an investment, our conviction lies in the belief that some AI stocks hold greater promise for delivering higher returns, and doing so within a shorter timeframe. If you are looking for an AI stock that is more promising than U but that trades at less than 5 times its earnings, check out our report about the cheapest AI stock.

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Disclosure: None. This article was originally published at Insider Monkey.