5 Oversold Stocks to Buy Under $20

Page 5 of 5

1. Unity Software Inc. (NYSE:U)

Unity Software Inc. (NYSE:U) is one of the best oversold stocks to buy under $20. Morgan Stanley lifted the price target on Unity Software Inc. (NYSE:U) to $32 from $30 on March 27, reiterating an Overweight rating on the shares. The rating update came after the company pre-reported “strong” 1Q results, including Vector growing 78% year-over-year and 15% quarter-over-quarter. The firm also cited Unity Software Inc.’s (NYSE:U) plans to exit the ironSource Ad Network, which Morgan Stanley expects to increase growth, margins, and EBITDA.

Unity Software Inc. (NYSE:U) announced preliminary revenue and adjusted EBITDA for the first quarter of 2026 above guidance on March 26, adding that it expects to report revenue in the range of $505 million to $508 million, compared to guidance of $480 million to $490 million. It also anticipated adjusted EBITDA of $130 million to $135 million, compared to guidance of $105 million to $110 million, representing year-over-year growth of 58%. Management attributed the outperformance to Unity Vector, which is anticipated to rise sequentially in fiscal Q1 2026, along with better-than-expected performance in Create.

Unity Software Inc. (NYSE:U) is involved in developing video gaming software and provides software solutions to run, create, and monetize interactive, real-time two-dimensional and three-dimensional content for tablets, consoles, mobile phones, and augmented and virtual reality devices.

While we acknowledge the potential of U to grow, our conviction lies in the belief that some AI stocks hold greater promise for delivering higher returns and have limited downside risk. If you are looking for an AI stock that is more promising than U and that has 100x upside potential, check out our report about the cheapest AI stock.

READ NEXT: 15 Stocks That Will Make You Rich in 10 Years AND 12 Best Stocks That Will Always Grow.

Disclosure: None. Insider Monkey focuses on uncovering the best investment ideas of hedge funds and insiders. Please subscribe to our free daily e-newsletter to get the latest investment ideas from hedge funds’ investor letters by entering your email address below.

Page 5 of 5