Unity Software shares surged 5% in Friday pre-market trading, extending a 15% rally from Thursday, after its second-quarter earnings beat Wall Street expectations and triggered a wave of analyst upgrades. The company reported revenue of $546 million, up 24% year-over-year, and adjusted EBITDA of $160 million, a 29% margin that expanded 800 basis points year-over-year. Deutsche Bank, BofA Securities, HSBC, and Benchmark all upgraded the stock to Buy from Hold, with Deutsche Bank, BofA, and Benchmark setting price targets of $50, up from $31, $30, and no prior target, respectively. The upgrades centered on the performance of Unity's Vector advertising platform, which analysts view as entering a sustained growth cycle, with BofA analyst Omar Desspuky calling the quarter an inflection point and Deutsche Bank analyst Ben Black comparing Vector's compounding performance to AppLovin's AXON 2 launch. UBS analyst Stephen Ju maintained a Neutral rating but raised the price target to $48 from $32, citing earlier-than-expected runtime data integration, while cautioning that investor focus may shift back to long-term AI disintermediation risks and potential disruption from the upcoming Unity 7 engine transition in 2027.
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UBS Group AGUnity Software IncQ2 earnings beat and analyst upgrades to Buy with higher price targets.
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