Jefferies Reiterates Buy Rating on Mellanox (MLNX)

Jefferies is out with an analyst note this morning that is reiterating their Buy rating on shares of Mellanox Technologies

. They also have a $30.00 price target on the stock. Jefferies cited the June 2010 edition of the Top500, a semi-annual list of the fastest supercomputers in the world, which was released yesterday morning at the International Supercomputing Conference (ISC) in Hamburg, Germany. InfiniBand interconnects (produced by MLNX) were used in 207 high performance computers (HPCs), up from 181 HPCs on the Nov '09 list, as the share gains came largely at the expense of Gigabit Ethernet (declined to 242 from 259 HPCs), with some additional erosion of proprietary interconnects from IBM and Cray. Jefferies analysts believe the results of the Top500 list illustrate increased traction of InfiniBand in the world's fastest supercomputers and we expect Mellanox to continue to benefit from growing demand for HPCs. While the Top500 list is not a perfect proxy for InfiniBand adoption, it is useful for identifying long-term trends in the HPC market and evidences a continued trend of increased adoption of InfiniBand interconnects.” “We expect GbE to remain "good enough" for many HPCs given its ubiquity and lower cost, particularly in processor intensive applications where the processor is the bottleneck vs. transactional applications (e.g., data mining) where the interconnect is the bottleneck.”