{"id":7563,"date":"2023-05-11T22:52:43","date_gmt":"2023-05-12T02:52:43","guid":{"rendered":"https:\/\/ifintechworld.com\/investing\/unity-says-ai-embrace-will-lead-to-growth-one-analyst-has-doubts\/"},"modified":"2023-05-11T22:52:44","modified_gmt":"2023-05-12T02:52:44","slug":"unity-says-ai-embrace-will-lead-to-growth-one-analyst-has-doubts","status":"publish","type":"post","link":"https:\/\/ifintechworld.com\/?p=7563","title":{"rendered":"Unity Says AI Embrace Will Lead to Growth. One Analyst Has Doubts."},"content":{"rendered":"
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\n Unity Software
\n stock was rising sharply Thursday after the company raised full-year guidance and said it was working toward profitability through its embrace of artificial intelligence. But one analyst expressed doubts about the company\u2019s AI efforts.<\/p>\n

Late Wednesday,
\n Unity
\n (ticker: U) reported a first-quarter loss of 67 cents a share on revenue of $500 million. Analysts surveyed by FactSet were expecting a loss of 73 cents a share on revenue of $480.9 million. <\/p>\n

\n

Unity also raised the low end of its 2023 revenue guidance by $30 million, and now expects full-year revenue of between $2.08 billion to $2.2 billion. <\/p>\n

Unity also said that it was continuing to work toward profitability through restructuring its teams and reducing offices, and by its adoption of artificial intelligence. The company last week announced that it planned on cutting 8% of its workforce.<\/p>\n

Oppenheimer analyst Martin Yang, who rates the stock at Perform without a price target, wrote in a research note Thursday that he likes Unity\u2019s profit outlook, but remains on the sidelines \u201cfor clearer signs of growth acceleration.\u201d<\/p>\n

In a letter to shareholders, Unity said it embraced AI \u201cyears ago\u201d and \u201csees the adoption of AI tools as an accelerant to our business based on our structural and sustainable competitive advantages.\u201d<\/p>\n

Benchmark analyst Mike Hickey wasn\u2019t convinced. He rates Unity stock at Sell with a $16 price target. He wrote in a research note Thursday that he believes \u201cUnity is a loser in an AI World.\u201d<\/p>\n

\u201cWe appreciate that Unity now believes they\u2019re an AI company, and that the massive disruption from AI and machine learning on game development will only serve to benefit them\u2014we are far less certain,\u201d Hickey said. \u201cWe believe AI and machine learning could be destructive to both Unity\u2019s growth and profitability.\u201d He added that it\u2019s possible a startup company can make similar products as Unity at lower expenses, possibly taking market share. <\/p>\n

When asked to comment, Unity pointed\u00a0Barron\u2019s\u00a0<\/em>to its commentary on the company\u2019s earnings call. Chief Executive John Riccitiello said on the call late Wednesday that Unity \u201chas sustainable competitive advantages in and around AI,\u201d which he called a \u201cstrong tailwind in quarters and years to come.\u201d<\/p>\n

\u201cUnity has sustainable competitive advantages in and around AI, not just because of what we\u2019re building in AI, because of the very nature of our platform,\u201d Riccitello said. \u201cThe very nature of our platform will benefit from AI tools and content creation, and we\u2019re uniquely able to enable creators to make things where worlds come alive.\u201d\u00a0<\/p>\n

Shares of Unity jumped 7.7% Thursday to $30.95. The stock has gained 8.3% this year.<\/p>\n

Write to Angela Palumbo at angela.palumbo@dowjones.com<\/p>\n<\/p><\/div>\n<\/div>\n

Read the full article here<\/a><\/p>\n","protected":false},"excerpt":{"rendered":"

Unity Software stock was rising sharply Thursday after the company raised full-year guidance and said it was working toward profitability through its embrace of artificial intelligence. But one analyst expressed doubts about the company\u2019s AI efforts. Late Wednesday, Unity (ticker: U) reported a first-quarter loss of 67 cents a share on revenue of $500 million. […]<\/p>\n","protected":false},"author":1,"featured_media":7564,"comment_status":"open","ping_status":"open","sticky":false,"template":"","format":"video","meta":{"footnotes":""},"categories":[239],"tags":[83],"class_list":["post-7563","post","type-post","status-publish","format-video","has-post-thumbnail","hentry","category-investing","tag-featured","post_format-post-format-video"],"yoast_head":"\nUnity Says AI Embrace Will Lead to Growth. 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