We came across a bullish thesis on Unity Software Inc. (U) on Twitter by AlphaSenseInc. In this article, we will summarize the bulls’ thesis on U. Unity Software Inc. (U)'s share was trading at $19.25 as of April 21^st.

A software developer in front of a monitor, coding to build the latest internet content & information.

Unity (U) remains the dominant force in the mobile gaming engine market, commanding over 70% of the sector despite increasing competition from Epic’s Unreal Engine, which caters more to AAA console and PC development. Unity's strength lies in its intuitive, mobile-first architecture, which aligns with the continued outperformance of mobile gaming relative to console and PC markets. Recent leadership changes, particularly the addition of Matthew Bromberg, reinforce Unity’s renewed commitment to its mobile core, moving away from prior ambitions in the AAA space. This strategic recalibration comes as Unity diversifies into adjacent industries such as automotive, architecture, construction, and oil & gas. The company's long-term efforts in these verticals have started to pay off, with its revenue mix gradually balancing between gaming and non-gaming applications. Automotive has emerged as a standout segment, with major manufacturers integrating Unity’s real-time 3D tools into their workflows. The expert notes that Unity’s customer churn stems mainly from small studios facing operational challenges, rather than defections to Unreal Engine, while net revenue retention consistently exceeds 100%—fueled by studio expansions and upsells. Despite a turbulent period marked by layoffs, management turnover, and strategic overreach, Unity's recent restructuring is viewed as necessary to refocus the business and optimize capital allocation. While some investor concerns are justified, the expert believes the market has overreacted, creating an opportunity. Unity’s core business remains resilient, underpinned by high-margin mobile dominance and a growing footprint in enterprise use cases. With a clearer strategy, a stronger leadership team, and organic growth driven by user expansion and ancillary product adoption, Unity appears positioned for a turnaround. If execution improves, the stock’s current price could represent a mispriced asset with significant upside, particularly as it returns to its strengths while prudently scaling new verticals.

Unity Software Inc. (U) is not on our list of the 30 Most Popular Stocks Among Hedge Funds. As per our database, 48 hedge fund portfolios held U at the end of the fourth quarter which was 35 in the previous quarter. While we acknowledge the risk and potential of U as an investment, our conviction lies in the belief that some AI stocks hold greater promise for delivering higher returns, and doing so within a shorter timeframe. If you are looking for an AI stock that is more promising than U but that trades at less than 5 times its earnings, check out our report about the cheapest AI stock.

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Disclosure: None. This article was originally published at Insider Monkey.