Unity (U) stock price surges by 15% following announcement of AI Marketplace.
On Tuesday, June 27, the stock price of Unity Software (NYSE: U) surged by more than 15% as the gaming toolmaker announced a marketplace for artificial intelligence software. This development comes at a time of hot and fresh developments taking place in the AI industry.
Unity is basically a game engine software producing games for smartphones, consoles, and virtual reality headsets. With the recent development, Unity customers will be able to choose from software that can do different things such as generating game dialogues, graphics, and textures by using AI from independent companies such as Polyhive and Inworld AI.
Additionally, these AI companies will be able to distribute their software to game makers and also charge for it through Unity’s Asset Store. In an interview with Associated Press on Monday, June 26, Unity CEO John Riccitiello said :
“I think AI will change gaming in a couple of pretty profound ways. One of them is it’s going to make making games faster, cheaper and better. It’s already happening.”
Amid the development in the AI industry as well as the gaming industry, the Unity share witnessed a strong surge this year. Since the beginning of 2023, the Unity stock is up by more than 57%.
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As of Tuesday’s closing the Unity stock was trading at 42.38 USD. Wells Fargo analyst Brian Fitzgerald has also given the company an overweight rating and a target price of $48.
Unity Stock Presents a Buying Opportunity
Wells Fargo analyst Brian Fitzgerald along with the team noted that investors see a buying opportunity at the current stock price of Unity. Furthermore, the company could expand its business outside of gaming through “digital twins” and other simulation products through enterprises. Fitzgerald wrote:
“Though we acknowledge that interactive entertainment industry consolidation may, over the long term, drive the development and use of proprietary game development tools/assets by large studios, we believe in Unity’s strong competitive positioning in the space.”
The note from the Wells Fargo analyst also noted that the hype around “metaverse” has been dying down thereby creating a buying opportunity. Prior to focusing on AI, Unity had strong ties to headset ventures like Meta , as its software enabled the creation of virtual reality applications. Recently, Apple announced that Unity-made VR apps would be compatible with its upcoming Vision Pro headset, set to launch in the early months of next year.