U - Unity announces AI marketplace: 'I think A.I. will change gaming'

2023-06-27 14:32:54 ET

Shares of Unity Software Inc ( NYSE: U ) gained nearly 15% on Tuesday after the video game software company announced an AI marketplace.

Unity expands its footprint in A.I.

Customers of the San Francisco-headquartered firm will now be able to pick from a list of software that can use artificial intelligence to accelerate game development and enhancement.

In an interview with “ The Washington Post ”, 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 games faster, cheaper, and better. It’s already happening.

It’s exciting also for the A.I. companies that will get to charge for software they’ll distribute to developers via the Unity Asset Store. At writing, Unity shares are up a whopping 55% versus the start of 2023.

Wells Fargo recommends buying Unity stock

Also on Tuesday, Brian Fitzgerald – a Wells Fargo analyst turned bullish on Unity shares and announced a price objective of $48 that suggests another 14% upside from here.

Though we acknowledge consolidation may, over long term, drive development and use of proprietary tools/assets by large studios, we believe in Unity’s strong competitive positioning in the space.

A growing total addressable market and mobile cross-sell opportunity were among other reasons cited for the bullish view on the tech stock.

The stock market news arrives more than a month after Unity Software reported better-than-expected revenue for its fiscal first quarter and issued upbeat guidance for the future.

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