Unity Software Inc. (U): A Bull Case Theory 

We came across a bullish thesis on Unity Software Inc. on Dragon’s Den Investing’s Substack. In this article, we will summarize the bulls’ thesis on U. Unity Software Inc.’s share was trading at $42.52 as of November 28th. U’s forward P/E was 90.91 according to Yahoo Finance.

Unity Software Inc. operates a platform to create and grow games and interactive experiences for mobile phones, PCs, consoles, and extended reality devices in the United States and internationally. U has experienced a tumultuous five-year journey, from its IPO at $52, peaking at $197 in 2021, falling to $15 in 2024, and now stabilizing around $43.

This volatility reflects both the company’s enormous potential and challenges in monetization. Unity’s software powers products reaching four billion monthly active users, but the company has historically struggled to capture value beyond gaming, missing opportunities in areas like in-game advertising where competitors such as Applovin have thrived.

Despite revenue declines in 2024, Unity’s new leadership under CEO Matthew Bromberg has restored investor confidence, driving a 118% rise in the past six months. The company now stands at a critical inflection point, balancing the opportunities AI presents with the risk of disintermediation by large language models generating game content. While AI can produce short-form content efficiently, complex games still require Unity’s engine to integrate assets and deliver a polished product, maintaining the company’s relevance.

Strategic partnerships with Tencent, Google, and Meta in AR/VR development reinforce Unity’s position in emerging XR platforms, and the recent MetaHorizon Engine announcement, while competitive, underscores the strategic value of Unity’s development tools. The company’s turnaround is not solely operational but also cultural, reflecting a board and management team more aligned with developer needs and shareholder value creation.

While financials remain challenging, Unity offers a high-risk, high-reward investment thesis, particularly for investors willing to tolerate volatility and focus on long-term secular trends in gaming, XR, and AI-driven content creation, with the potential for significant compounding if execution continues under the new leadership.

Previously we covered a bullish thesis on Unity Software Inc. (U) by AlphaSenseInc. in May 2025, which highlighted Unity’s mobile gaming dominance, strategic refocus under new leadership, and diversification into industries like automotive and architecture. The stock has appreciated approximately by 94.95% since our coverage. The thesis still stands as Unity continues expanding into AI-driven content and XR platforms. Dragon’s Den Investing shares a similar perspective but emphasizes monetization challenges and strategic partnerships.

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Disclosure: None.