Unity Software (U) Climbs 18% on Earnings Beat

We recently published 10 Big Names Leading Wall Street Gains. Unity Software Inc. (NYSE:U) is one of the best-performing stocks on Wednesday.

Unity Software grew its share price by 18.09 percent on Wednesday to end at $42.36 apiece after beating earnings expectations for the third quarter of the year.

In an updated report, Unity Software Inc. (NYSE:U) said it was able to grow its revenues by 5.4 percent to $471 million from $447 million in the same period last year, beating its earlier guidance of $440 million to $450 million.

Revenues were primarily driven by higher subscription revenues and strong performance from the Unity Ad Network powered by Unity Vector.

However, Unity Software Inc. (NYSE:U) remained at a 1.6 percent higher net loss at $127 million versus $125 million year-on-year.

“Third-quarter results once again meaningfully exceeded expectations on both revenue and Adjusted EBITDA, powered by Unity Vector AI, as well as continued strength in Create. As consumer enthusiasm for interactive entertainment continues to grow, Unity is poised to grow with it,” the company said.

Looking ahead, Unity Software Inc. (NYSE:U) is targeting to hit revenues between $480 million and $490 million and adjusted EBITDA ranging from $110 million to $115 million.

While we acknowledge the potential of U as an investment, 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 extremely cheap AI stock that is also a major beneficiary of Trump tariffs and onshoring, see our free report on the best short-term AI stock.

READ NEXT: 30 Stocks That Should Double in 3 Years and 11 Hidden AI Stocks to Buy Right Now.

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