U - Unity Software Stock Skyrockets 46% in June as AI Buzz Takes Over
2023-07-03 17:34:35 ET
Shares of Unity Software (NYSE: U) skyrocketed 46.1% in June, according to data provided by S&P Global Market Intelligence . The month started off with fireworks from Apple that are relevant to Unity shareholders. And it ended with a bang related to artificial intelligence (AI), Wall Street's favorite subject at the moment.
To give this story some context, I want to point out that the market had lost a lot of confidence in Unity Software stock. When they first went public, shares regularly traded above a price-to-sales (P/S) ratio of 30. By comparison, they traded below a P/S of 7 at the start of June. That's still high in absolute terms. But in relative terms, this valuation was more than 80% below where it had routinely traded.
Unity's own revenue growth was ample reason for the market's pessimism. And even though its growth has since rebounded, as the chart below shows, this is largely due to an acquisition. Its organic growth is still challenged.
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Unity Software Stock Skyrockets 46% in June as AI Buzz Takes Over