Unity Software: AI Disruption Fears Overdone; Competitive Moat and Monetization Model Support Buy Rating

William Blair analyst Dylan Becker has maintained their bullish stance on U stock, giving a Buy rating on January 15.

Dylan Becker has given his Buy rating due to a combination of factors related to Unity’s competitive positioning and the recent market overreaction. He argues that investors are overly focused on Google’s Project Genie announcement and are underestimating the sophistication, maturity, and breadth of Unity’s game engine, which already incorporates comparable AI capabilities and supports the full game lifecycle from creation to monetization. Becker also highlights Unity’s cross-platform flexibility—allowing developers to build once and deploy across more than 20 platforms—as a key advantage that enhances developer productivity and stickiness. In his view, the stock’s sharp decline on AI disruption fears does not properly reflect these strengths and therefore represents an attractive entry point.

Furthermore, Becker underscores Unity’s monetization model as structurally compelling, pointing out that most users can access the platform for free until they reach $200,000 in annualized revenue, after which seat-based pricing still compares favorably to higher take-rate alternatives. He notes that Google AI Ultra, the service tied to Project Genie, comes at a higher monthly price than a Unity Pro subscription, despite Unity’s deeper capabilities and existing ecosystem, reinforcing his view that Unity remains competitively priced and well positioned. Becker also believes that as AI-powered tools make content creation more accessible, the overall market for creative professionals will expand, increasing demand for Unity’s runtime, discovery, and monetization solutions. Taken together, these factors lead him to conclude that the recent sell-off is an overreaction and that Unity’s long-term fundamentals justify a Buy rating.

In another report released on January 15, Freedom Capital Markets also initiated coverage with a Buy rating on the stock with a $52.00 price target.

Based on the recent corporate insider activity of 86 insiders, corporate insider sentiment is negative on the stock. This means that over the past quarter there has been an increase of insiders selling their shares of U in relation to earlier this year.