Wedbush Securities issued a client note defending Unity Software (U) following stock pressure from the launch of CloudX, a new AI-infused mobile advertising startup. The firm maintains that Unity’s structural moats remain intact despite potential disruptions to the mobile advertising stack.
Unity shares declined on the previous trading day following the emergence of the new competitor. Wedbush analysts characterized the pressure on the mobile ad ecosystem as a combination of warranted structural repricing and indiscriminate selling.
The commentary provides a counter-narrative to the negative sentiment that recently drove the stock down. Wedbush suggests the fundamental strengths of Unity’s business model remain despite the new market entrant.