Unity Software Inc

Scality has introduced the AI Inference Factory, an open-code software stack that lets enterprises run AI inference on their own infrastructure. The offering is positioned as an alternative to cloud-based AI services, giving organizations more predictable costs, greater control over AI model management, and data sovereignty. The stack brings together components for managing AI workloads with flexibility across models, hardware, and software, addressing cost, data security, and regulatory compliance challenges enterprises face as they scale AI in production. In other trading, Sangfor Technologies rose 8.6% to close at CN¥138.96, while Hut 8 fell 10.9% to close at $79.59. Alphabet settled at $348.29, down 0.6%, after Google announced a strategic partnership with Unity to launch an AI-driven gaming platform later this year; Microsoft settled at $522.61, down 1.3%; and Oracle finished at $135.69, down 5.5%, after UiPath Test Cloud became available on Oracle Marketplace three days ago.

Raymond James upgraded Unity Software to Outperform and lifted its price target, sending shares up 2% in premarket trading on Thursday. Analyst Andrew Marok wrote that the firm's view had already become increasingly constructive following materially stronger-than-expected execution in Grow, where Vector growth and resulting operating leverage have moved ahead of the more gradual initiation. He said the partnership with Google meaningfully improves Unity's competitive position by pairing its creation and runtime technology with Google's AI and consumer distribution, addressing concerns about the durability of Unity's creator and content funnel as platforms like Roblox and generative AI tools lower barriers to game creation. Unity and Google announced the partnership on Wednesday for a new, integrated gaming platform coming later this year that will combine Google AI, the reach of Google's billion-user products, and Unity's game-building expertise. The two companies will also introduce an expanded creation experience called Unity Spark later this year, built for a new generation of creators.

Roblox Corp shares fell as much as 8% in pre-market trading Wednesday and were recently down about 5% after Google and Unity Software Inc announced a partnership to build an AI-powered game creation platform. The companies said in a press release they will develop an integrated gaming platform featuring AI-powered tools that allow users to create games without coding experience, representing potential competition for Roblox in the user-generated gaming market. Google launched an experimental platform called Playground, now available to users aged 18 and older, which lets users generate and customize playable games using natural language prompts. The companies plan to introduce Unity Spark later this year, a product built on Playground that will offer advanced capabilities including professional-level mechanics, high-fidelity 3D features, and access to the Unity runtime, and the platform will integrate with Google Play Games, providing leaderboards, multiplayer matchmaking, and community features. On September 28, Jefferies downgraded Roblox to Underperform from Hold and maintained its $38 price target, implying 18% downside, with analyst James Heaney saying the stock's 30% rally since second-quarter results reflects overly optimistic expectations for bookings over the next 12 months.

Unity Software shares rose 5% Wednesday morning after the company announced a strategic partnership with Google to develop a new AI-powered gaming platform. The partnership will combine Google's artificial intelligence technology with Unity's game engine to create tools that let users generate and customize playable games using natural language prompts without coding. Google introduced an experimental platform called Playground, available today for users 18 and older, which allows game creation through text prompts. Later this year, Google and Unity will launch Unity Spark, a new product designed to offer both accessible interfaces for beginners and professional-level mechanics for advanced creators, featuring high-fidelity 3D capabilities and the Unity runtime. The platform will leverage Google's consumer ecosystem for distribution, with Google planning to showcase selected Playground creations across its network, and it integrates with Google Play Games profiles for built-in leaderboards, multiplayer matchmaking, and community features. Roblox shares fell 7.8% following the announcement, as the new Google-Unity platform represents potential competition in the user-generated gaming space.

Unity Software announced day one engine support for Meta VR Glasses, the next Meta headset slated for launch in spring 2027. The news gives Unity a clear role in Meta's next virtual reality cycle, and the stock has run hard into that story, with a 7 day share price return of 14.6% and a 90 day gain of 54.01%, while the 1 year total shareholder return of 21.72% sits against a 5 year total shareholder return that declined 66.34%. Unity Software closed at $45.68, against a widely followed fair value estimate of $49.39 that implies roughly 8% undervaluation and rests on expectations of $3.6b in revenue and $989.9m in earnings by 2029, a future P/E multiple of 30.8x, and a 27.9% profit margin in three years. The thesis carries clear pressure points, including heavy AI and product spending, execution risk in non gaming categories such as automotive and healthcare, privacy rules that could limit ad performance, and reliance on large deals with groups such as Tencent and Scopely, all set against a current net loss of $587.5m. On price based yardsticks the stock trades at a P/S ratio of 9.9x, versus 3.9x for the broader US software group and 5.8x for closer peers, with a fair ratio of 8.5x.

Unity Software said it will provide day one engine support for Meta's next-generation VR Glasses, giving creators a toolkit to build launch experiences with advanced rendering features and direct integration with Meta's AI assistants and workflows. Developers can begin preparing titles ahead of the headset release using updated Unity plugins aligned with Meta's latest VR and mixed reality APIs. Unity runs a development platform used to create and deploy games and interactive 3D content across mobile, PC, consoles, and extended reality devices, so close alignment with Meta's headset tools helps keep its engine embedded in the workflows many VR and mixed reality teams already use. The real proof point will come as launch titles and tool usage for Meta VR Glasses start to show up in Unity's Create segment metrics around and after the spring 2027 retail release, especially any disclosure on subscription uptake or partner expansion tied specifically to XR projects.

Unity Software Inc. closed at $41.16, down 1.63% from the prior session, lagging the S&P 500's 0.17% gain. The company is projected to post earnings of $0.34 per share for its upcoming quarter, a 70% increase from the same quarter last year, on revenue of $564.84 million, up 20.02%. For the full fiscal year, the Zacks Consensus Estimates project earnings of $1.21 per share and revenue of $2.22 billion, representing growth of 40.7% and 19.95%, respectively. Unity carries a Zacks Rank of #2 (Buy), with the consensus EPS estimate unchanged over the past 30 days, and trades at a forward P/E of 34.58 versus an industry average of 20.16.

Design software stocks delivered a strong second quarter, with the six companies tracked beating revenue consensus estimates by 1.4% and issuing next-quarter guidance 2.9% above expectations. Procore Technologies reported revenues of $375.2 million, up 15.8% year on year, exceeding analysts' expectations by 2.6%, while Unity posted revenues of $546.5 million, up 23.9% year on year, outperforming expectations by 6.1%. PTC reported revenues of $600 million, down 6.8% year on year, falling short of expectations by 1.3%, and Adobe reported revenues of $6.62 billion, up 12.7% year on year, surpassing expectations by 2.6%. Cadence Design Systems reported revenues of $1.58 billion, up 24.2% year on year, beating expectations by 0.5%. Share prices of the group have risen 17.9% on average since the latest earnings results.

Unity reported second-quarter revenue of $546.5 million, beating analyst estimates of $515.1 million and growing 23.9% year over year, while adjusted EPS of $0.28 also topped expectations. Adjusted EBITDA came in at $160.2 million, above the $136.6 million consensus, and the company guided third-quarter EBITDA to $187.5 million at the midpoint, well ahead of the $152.2 million analysts had projected. During the earnings call, analysts from Morgan Stanley, Wells Fargo, BTIG, Cannonball, and Goldman Sachs pressed management on the feedback loop between Vector and Create, margin protection, model improvements, Unity 7 differentiation, and incremental margins. CEO Matthew Bromberg highlighted a 63% year-over-year increase in the Strategic Grow business and emphasized the role of runtime data and AI integration in driving growth.

Unity reported second-quarter fiscal 2026 revenue of $546.5 million, exceeding analyst estimates of $515.1 million and representing 23.9% year-on-year growth. Non-GAAP earnings per share came in at $0.28, beating the consensus of $0.25 by 12.4%, while adjusted EBITDA of $160.2 million topped expectations by 17.2%. Management attributed the strong performance to rapid adoption of its Vector AI-powered ad platform and a 63% year-over-year increase in its Strategic Grow business. The company also provided third-quarter EBITDA guidance of $187.5 million at the midpoint, above analyst forecasts of $152.2 million, and highlighted new strategic partnerships including one with Netflix to power its multi-platform gaming ecosystem.

Unity Software shares surged 5% in Friday pre-market trading, extending a 15% rally from Thursday, after its second-quarter earnings beat Wall Street expectations and triggered a wave of analyst upgrades. The company reported revenue of $546 million, up 24% year-over-year, and adjusted EBITDA of $160 million, a 29% margin that expanded 800 basis points year-over-year. Deutsche Bank, BofA Securities, HSBC, and Benchmark all upgraded the stock to Buy from Hold, with Deutsche Bank, BofA, and Benchmark setting price targets of $50, up from $31, $30, and no prior target, respectively. The upgrades centered on the performance of Unity's Vector advertising platform, which analysts view as entering a sustained growth cycle, with BofA analyst Omar Desspuky calling the quarter an inflection point and Deutsche Bank analyst Ben Black comparing Vector's compounding performance to AppLovin's AXON 2 launch. UBS analyst Stephen Ju maintained a Neutral rating but raised the price target to $48 from $32, citing earlier-than-expected runtime data integration, while cautioning that investor focus may shift back to long-term AI disintermediation risks and potential disruption from the upcoming Unity 7 engine transition in 2027.

SoundHound AI rallied 12%, Unity Software rose 11%, and Datadog sank 15% on Thursday as traders separated software winners from losers following earnings results. SoundHound surged after posting second-quarter revenue of $61.9 million, beating the $52.4 million consensus estimate, and raising full-year 2026 revenue guidance to $230 million to $260 million. Unity jumped after reporting second-quarter revenue of $546 million, up 24% year-over-year and above the $514.6 million consensus, with CEO Matt Bromberg calling it arguably the best quarter in Unity's history as a public company. Datadog dropped despite beating estimates with second-quarter revenue of $1.12 billion and non-GAAP earnings per share of $0.65, as its 108% year-to-date gains created valuation pressure. The Invesco QQQ Trust was roughly flat on the day, highlighting the stock-specific moves.

The Alliance for OpenUSD has added ByteDance, Huawei, Physicl, and Unity as General Members, expanding its reach into gaming, consumer XR platforms, and large-scale enterprise digital transformation. The organization has also begun the ISO certification process for Core Specification 1.1, the first step toward international standardization, and launched a GitHub repository to give developers direct input into the specification's evolution. OpenUSD is emerging as the 3D data layer for agentic AI workflows, with early implementations from Cesium, PTC, and NVIDIA demonstrating how AI agents can understand, navigate, and modify 3D environments built on the Core Specification. AOUSD and member companies including Pixar, NVIDIA, Autodesk, and Epic Games will present sessions at SIGGRAPH 2026 in Los Angeles from July 19 to 23.

Unity announced plans for Unity 7, its next-generation authoring platform, at Unite Seoul. The platform is designed for collaborative work among developers, artists, producers, and coding agents across the full development lifecycle, and will not require a traditional upgrade from Unity 6. Unity 7 is built on five core pillars: faster creation with a modernized CoreCLR core and up to 90% faster shader builds, an open ecosystem with a new CLI and public API, breakthrough graphics including realtime global illumination via Surface Cache GI, smarter growth and monetization through the Unity Vector AI engine and native direct-to-consumer IAP, and no breaking changes from Unity 6. The platform will enter early beta testing in December, with a full release scheduled for Q1 2027.

Raymond James initiated coverage of Unity Software with a Market Perform rating on June 29. The brokerage highlighted Unity's deeply embedded game engine across multiple platforms, supporting a long-term subscription revenue base, and noted the potential of its AI-driven advertising platform Vector to improve margins and competitiveness. Raymond James also sees growth opportunities in in-app commerce, cross-platform gaming, and industry subscriptions. Unity's strategic revenue grew 35% year-over-year in the first quarter, and the company forecasts 29% to 32% growth for the second quarter of 2026.

Unity Software has an average brokerage recommendation of 1.81, based on ratings from 26 analysts, with 15 Strong Buy and one Buy recommendation. The Zacks Rank for Unity Software is currently a Buy, supported by a 5.6% increase in the consensus earnings estimate for the current year over the past month. Investors are cautioned that brokerage recommendations may carry a positive bias and should not be the sole basis for investment decisions.

Zacks Investment Research has identified five technology stocks that have posted double-digit negative returns this year even as the Information Technology Select Sector SPDR, one of the 11 broad-sectors of the S&P 500 Index, is the best-performing sector with a return of 33.2% year to date. The five stocks, each carrying a Zacks Rank of 1 (Strong Buy) or 2 (Buy), are Palantir Technologies, Atlassian, Toast, Unity Software, and Roper Technologies. Palantir is expected to grow revenue and earnings by 71.8% and 98.7% respectively for the current year, while Atlassian's next-year estimates have been revised upward by 13.3% over the last 60 days. Toast and Unity Software also show strong growth projections, and Roper Technologies benefits from strength across its application and network software segments.