Grantley Launch to Support Mallnox's Growth & Ethernet Demand, According to Summit

In a report published Tuesday, Summit Research analyst Srini Nandury commented that

could see a boost from Intel's

Grantley processor. Nandury reiterated a Buy rating and $52.00 price target on Mellanox, expecting the Grantley ramp to be launched in September. The analyst wrote, “We believe the Grantley launch would be a key catalyst for Mellanox, in addition to the arrival of 100Gbs (EDR) Infiniband that we have been waiting for much for past year. Mellanox already launched 100Gbs switches and we expect the company to launch adapter cards within the next few weeks, in conjunction with Grantley. In addition, we expect Mellanox to launch 100GbE Ethernet likely by the end of the year.” Summitt emphasized that the Grantley launch will likely aid Mellnox's growth and Ethernet demand. Nandury sees the processor driving HPC growth over the next three to four quarters, which makes up approximately 50 percent of revenue. The firm further noted that the launch will drive Ethernet demand and the adoption of SSDs and flash memory. These demands will, therefore, also aid in spurring “the adoption of low latency Infiniband or RDMA over Ethernet (RoCE).” Shares of Mellanox closed at $31.03 on Monday. Summit's $52.00 price target suggests more than a 67 percent upside.