Jefferies remains positive on Unity and AppLovin after Project Genie release

After Google (GOOGL) announced last week that Google AI Ultra subscribers in the U.S. can now try out Project Genie, its research prototype that lets users create and explore worlds, Jefferies analyst Brent Thill noted that investors digesting the impact of the world models for video game content creation erased about $47B of U.S. gaming market cap on Friday. However, for Unity (U) and Roblox (RBLX), the firm views it as more likely they partner to add world models to their game engines than all developers leaving for AI alternatives. For AppLovin (APP) and Unity ads, the firm adds that a proliferation in AI content puts distribution at even more of a premium, requiring ads to stand out. In net, the firm views fears as overblown and would buy the dip, the analyst tells investors. The firm has Buy ratings on AppLovin and Unity along with a Hold rating on Roblox.