Unity Software Short Interest Hits 8.09% of Float

Unity Software's short percent of float has risen 10.37% since its last report, with 32.52 million shares sold short, which is 8.09% of all regular shares available for trading. Based on its trading volume, it would take traders 3.36 days to cover their short positions on average. This increase in short interest could signal a bearish market sentiment, although it can also be bullish for a stock. Unity Software's peer group average for short interest as a percentage of float is 6.58%, indicating that the company has more short interest than most of its peers.

Title: Unity Software Inc. (U) Short Interest Surges Amid Market Volatility

Unity Software Inc. (U) has seen a significant increase in its short interest, with the short percent of float rising by 10.37% since its last report. As of July 2, 2025, 32.52 million shares have been sold short, representing 8.09% of all regular shares available for trading. This elevated short interest could signal a bearish market sentiment, although it can also be bullish for a stock [1].

The increase in short interest is notable, especially given that it would take traders approximately 3.36 days to cover their short positions on average. This metric indicates the potential for increased buying pressure if the stock moves in the opposite direction of the short sellers' positions. Unity Software's peer group average for short interest as a percentage of float is 6.58%, suggesting that the company has more short interest than most of its peers [1].

Unity Software's recent stock performance has been mixed. The stock closed at $32.77 on July 1, 2025, marking a -1.71% move from the previous day. This change was less than the S&P 500's daily gain of 0.4%. The company has witnessed a gain of 42.48% over the previous month, outperforming the Computer and Technology sector's gain of 6.84% and the S&P 500's gain of 4.61% [1].

The company is scheduled to release its earnings on August 6, 2025, with analysts expecting earnings per share (EPS) of -$0.25, up 21.88% from the prior-year quarter. Revenue is anticipated to be $425.83 million, down 5.21% from the prior-year quarter [1].

Investors should also pay attention to any changes in analyst estimates for Unity Software Inc. Recent revisions in estimates tend to reflect the evolving nature of short-term business trends. The Zacks Rank system, which ranges from #1 (Strong Buy) to #5 (Strong Sell), has an impressive track record of outperformance, with #1 stocks generating an average annual return of +25% since 1988. Unity Software Inc. currently has a Zacks Rank of #2 (Buy) [1].

In July 2025, Unity Software's stock has seen a wave of insider selling, with executives and directors offloading $39 million in shares in Q2 alone. This selling could indicate a lack of alignment with shareholders or routine portfolio rebalancing. The company's stock has surged 87.62% year-to-date, trading near its 52-week high of $34.55, yet recent analyst downgrades have raised concerns about its valuation and operational risks [2].

The BTIG analysts downgraded Unity from "Neutral" to "Sell," citing concerns about Unity's 40% rally in early 2025 outpacing its fundamental improvements. However, Jefferies upgraded the stock to $35, highlighting Unity Vector's ROAS improvements and the adoption of Unity 6 by 43% of active users [2].

Unity's core business segments show mixed results. The Create Solutions segment saw an 8% year-over-year revenue decline in Q1 2025, while the Grow Solutions segment is undergoing a critical transformation with Unity Vector delivering a 15–20% uplift in ad performance [2].

In conclusion, Unity Software Inc.'s short interest surge and mixed analyst sentiment highlight market uncertainty. While the company's AI-driven innovations and expansion into non-gaming markets offer compelling upside, investors must weigh the risks of strategic execution against the allure of its disruptive potential. For now, a cautious "Hold" seems prudent until Unity can demonstrate consistent progress in monetizing its AI-driven platforms and stabilizing its leadership [2].

References:
[1] https://www.nasdaq.com/articles/unity-software-inc-u-stock-falls-amid-market-uptick-what-investors-need-know-0
[2] https://www.ainvest.com/news/unity-software-downgrade-justified-mixed-analyst-sentiment-insider-selling-2507/