Although we don't believe in timing the market or panicking over market movements, we do like to keep an eye on big changes -- just in case they're material to our investing thesis.
What: Shares of fabless semiconductor specialist Mellanox Technologies (NAS: MLNX) climbed as high as 10.7% on Monday after its adapter silicon was chosen by Intel (NAS: INTC) for use in their I/O Expansion modules and half-width server boards.
So what: While financial terms of the deal weren't disclosed, being selected by the world's largest chip maker naturally reinforces the optimism over Mellanox's revenue growth going forward. In fact, the stock is hitting an all-time high today on the news, roughly doubling over the past six months alone.
Now what: Given the recent rollout of Intel's Romley platform -- requiring faster interconnection speeds -- I wouldn't expect the demand for Mellanox's products to wane anytime soon. "Intel's deployment of Mellanox InfiniBand silicon is a testament to the high performance and efficiency of our solutions," said David Barzilai, vice president of marketing at Mellanox. "Server and storage OEMs looking to roll out faster and more powerful systems will maximize their products' potential with Mellanox InfiniBand solutions." Of course, when you consider Mellanox's 100-plus P/E, much of that potential might already be baked into the red-hot stock price.
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At the time thisarticle was published Fool contributor Brian Pacampara owns no position in any of the companies mentioned. The Motley Fool owns shares of Intel. Motley Fool newsletter services have recommended buying shares of Intel. Try any of our Foolish newsletter services free for 30 days.We Fools may not all hold the same opinions, but we all believe that considering a diverse range of insights makes us better investors. The Fool's disclosure policy always gets a perfect score.
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