NEW YORK, Feb 2, 2026, 12:06 (EST) — Regular session
- Unity shares climbed in midday trading, rebounding from a steep drop last week sparked by Google’s launch of a new AI world-generation tool.
- Wall Street research desks remain divided over whether AI-native creation tools will cut into demand for game engines.
- Attention now shifts to Unity’s quarterly earnings and management’s take on advertising and AI trends.
Shares of Unity Software (U) climbed roughly 3.2% to close at $30.04 on Monday, bouncing between $29.06 and $31.64 during the session.
The stock aimed to stabilize following Friday’s sharp drop, ending at $29.10, a 24.22% decline. Unity fell alongside Take-Two Interactive and Roblox. (The Verge)
The whipsaw is crucial since Unity occupies a central spot in the game-making supply chain. Should investors begin to think AI can create playable worlds without the usual tools, the conversation flips from “new feature” to “new workflow” — and valuations can change swiftly.
Google’s Project Genie is fast becoming the symbol of this new risk. It can whip up interactive worlds from text or images, sparking fresh doubts about whether developers will still rely on game engines like those from Unity or Epic Games to manage physics, lighting, and object behavior. “We’ll see a real transformation in development and output once AI-based design starts creating experiences that are uniquely its own,” said Joost van Dreunen, a games professor at New York University Stern School of Business. (Reuters)
On Monday, Benchmark stuck to its hold rating on Unity, pointing to “world model” developments as a possible threat to the company’s Create tools. Other firms, however, remained more optimistic about Unity’s growth and product momentum. (Investing)
Unity pushed back against claims that prompt-built worlds could stand in for production-grade development. CEO Matthew Bromberg tweeted that prompts “limit the level of determinism and precision required for production-grade game mechanics.” (KitGuru)
Traders are debating if Friday’s drop marked a reset in expectations or just a one-off shock that will fade as the headlines die down. Monday’s rebound didn’t settle that question, but it did reveal buyers remain ready to jump in near $30.
That said, the risk is clear-cut: if investors start worrying that AI-driven creation tools will cut into engine demand faster than anticipated, Unity’s revenue and pricing could take a hit. A slip-up in ad results or weaker guidance might trigger a swift sell-off.
Unity will release its fourth-quarter and full-year results on Feb. 11 before the market opens, followed by a webcast at 8:30 a.m. ET. (Unity)
