Dec. 2, 2014, 10:40 AM
- Mellanox (NASDAQ:MLNX) is about to see "18-24 months of tailwinds in the interconnect space driven by strength in the HPC industry, the Grantley server refresh cycle, data center and storage spending trends, strength in the 40G market and the eventual move towards 100G," predicts Barclays, upgrading the InfiniBand adapter/switch leader to Overweight.
- Barclays does think interconnect competition will intensify - the Street has already been on edge over Intel's plans to encroach on Mellanox's turf - but nonetheless thinks Mellanox can maintain a strong high-end position.
- Though still well below its 2012 highs, Mellanox is now up 44% from a June low of $30.58. Growing non-HPC sales and a strong early reception for Intel's Grantley Xeon CPUs has helped its cause.
Nov. 17, 2014, 7:07 PM
- Intel (NASDAQ:INTC) has officially launched its MICA smart bracelet (previous). The device is priced at $495, and aimed at women. It features a 1.6" OLED display, and delivers texts, e-mails, and Facebook/Google notifications over AT&T's 3G network. Two years of free data is bundled.
- Much like Qualcomm wth its Toq smartwatch, it doesn't look as if Intel's goal is to challenge Apple and Samsung's wearables, but to provide a proof-of-concept for OEMs looking to create similar hardware running on Intel processors. Intel began shipping its low-power Quark CPUs this year, and has also developed Atom CPUs meant for embedded devices.
- Meanwhile, Intel has shared more details Knights Landing, an upcoming 14nm product for its Xeon Phi co-processor line (used in HPC/supercomputer systems), and added Knights Hill, a successor product that will use a 10nm process, to its roadmap.
- Knights Landing, which succeeds the current Knights Corner in 2H15, is said to deliver a 3x improvement in single-thread performance. It includes up to 16GB of memory, can work either as a co-processor or a standalone processor, and relies on a new interconnect fabric (called Omni-Path) that Intel promises will deliver better performance and require fewer switches than the widely-used InfiniBand - that makes it a potential challenge for Mellanox (NASDAQ:MLNX).
- The product takes aim at Nvidia's (NASDAQ:NVDA) leading position in the HPC co-processor market. Today, Nvidia unveiled the Tesla K80, a high-end HPC co-processor said to deliver 8.7 teraflops of single-precision throughput (74% above the prior-gen K40). The K80 sells for $5,000, and contains two of Nvidia's new (28nm) GK210 GPUs.
Nov. 14, 2014, 11:34 AM
- The Department of Energy has awarded $325M in contracts to IBM (IBM +0.6%) to create two GPU-accelerated supercomputers declared to be at least 3x more powerful than any existing system.
- The systems will rely on IBM's Power CPUs, Nvidia's (NVDA +0.5%) Tesla GPUs and NVlink GPU interconnects, and Mellanox's (MLNX +2.1%) 100Gb/s InfiniBand interconnects. Installation is expected in 2017.
- IBM asserts the systems will lower energy consumption by limiting data movement. The deal acts as a nice reference win for Power - Big Blue is trying to stem Power's share losses to Intel's Xeon CPUs by selling to 3rd-party server OEMs and licensing the architecture to other chip developers. Its powerful Power8 CPU (12 cores supporting 96 simultaneous threads) began shipping earlier this year.
- Separately, the DOE says it will invest $100M in FastForward2, an R&D program to create more powerful/energy-efficient supercomputers. IBM, Nvidia, Intel, AMD, and supercomputer maker Cray (CRAY +0.1%) are among the companies taking part.
- PRs: IBM, Nvidia, Mellanox
Nov. 12, 2014, 9:37 AM
- Mellanox (NASDAQ:MLNX) "has determined that [its] accounting for charitable contributions and certain purchase orders in prior periods needs to be revised," and is delaying its Q3 10-Q filing as a result.
- Though management has concluded "the Company’s previously-issued quarterly and annual financial statements were not materially misstated," the cumulative amount would be material to 2014 results if recorded in full during Q3.
- Moreover, Mellanox thinks "these matters are indicative of material weaknesses in the Company’s internal control over financial reporting." It plans to revise its 2011-2013 financial statements.
Nov. 12, 2014, 9:18 AM
Oct. 24, 2014, 5:37 PM
Oct. 22, 2014, 4:41 PM
- Mellanox (NASDAQ:MLNX) expects Q4 revenue of $133M-$137M, above a $129.3M consensus.
- Q3 results beat estimates on the back of strong InfiniBand hardware demand for HPC deployments (boosted by Intel's Grantley Xeon CPU launch), as well as higher Ethernet product sales. Mellanox expects rising shipments of 40G Ethernet adapters (carrying higher ASPs than 10G adapters) to Web/cloud clients to provide a Q4 lift.
- Gross margin rose 110 bps Y/Y to 70.2%. GAAP opex rose 13.5% Y/Y to $82.3M. GM is expected to be in a 69%-70% range in Q4.
- MLNX +2.7% AH. Q3 results, PR.
Oct. 22, 2014, 4:11 PM| Comment!
Oct. 21, 2014, 5:35 PM
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Oct. 14, 2014, 6:07 PM
- Intel's (NASDAQ:INTC) Data Center Group saw broad-based strength in Q3, CEO Brian Krzanich noted on the CC. Enterprise sales rose 11%, networking 16%, HPC 22% (good for MLNX), and cloud 34%.
- He added Intel's new Grantley Xeon CPUs are seeing strong uptake, and that the chip giant now has 35 custom Xeon SKUs for various clients. Facebook, eBay, Microsoft, and other Web giants have been avid buyers of custom Intel server CPUs.
- 15M tablet CPUs were shipped in Q3; Intel still expects 40M in 2014. The company promises a "substantial improvement" in mobile chip profitability next year as contra revenue payments drop, but doesn't expect the segment to turn profitable.
- Aside from a stabilizing market, Intel thinks PC division sales benefited from share gains (no doubt against AMD) and higher inventories (they were depressed a year ago). A couple of analysts pressed Intel on inventories; the company insists customers have an "appropriate amount." A mix shift towards Bay Trail Atom CPUs pressured ASPs.
- On CNBC (video), CFO Stacy Smith noted developed markets are still faring better than emerging markets, and argued Microchip (responsible for the warning heard round the chip world) "[plays] in different segments." Linear Technology, which has more customer overlap with Microchip, just missed estimates and issued light guidance.
- INTC +2.7% AH. AMD +1.2%. MU +1.8%.
- Q3 results, details.
Sep. 30, 2014, 9:13 AM
- Believing the company is "well-positioned to capitalize" on a server upgrade cycle fueled by Intel's Grantley Xeon CPUs (launched earlier in September), Piper's Andrew Nowinski has upgraded Mellanox (NASDAQ:MLNX) to Overweight, and hiked his target by $10 to $50.
- Nowinski sees Grantley boosting Mellanox's sales and earnings growth for the next 4-6 quarters. He also points out shares have fallen 11% since July 2013 (when Piper downgraded them), while the Nasdaq is up 25%.
- Mellanox's management has already forecast Grantley will boost the company's HPC-related sales (roughly half of its revenue).
Aug. 27, 2014, 7:21 PM
- IDC estimates global server sales rose 2.5% Y/Y in Q2 to $12.6B. That marks a turnaround from the 2.2% drop seen in Q1, and the 4.4% drop seen in Q4. Gartner estimates sales grew 2.8%.
- IDC declares the server market, hurt in recent quarters by system consolidation and a shift in demand towards the white-label gear beloved by Web giants (referred to by IDC as ODM Direct), is seeing "the beginning of a cyclical refresh cycle." It sees the pending launch of Intel's (NASDAQ:INTC) Grantley Xeon CPUs, along with Microsoft's plans to end Windows Server 2003 support, lifting sales into 2015.
- Sales of x86 servers (mostly Intel-based) rose 7.8% in Q2, and now make up 78% of industry revenue. Non-x86 server sales fell 12.8%.
- Market leader H-P's (NYSE:HPQ) share rose 40 bps Y/Y to 25.4%, with x86 growth offsetting Itanium weakness. #2 IBM's share fell 340 bps to 23.6% ahead of the sale of its x86 server ops to Lenovo; on the bright side, IBM's decline narrowed from Q1's 600 bps.
- #3 Dell's share fell 160 bps to 16.2%. #4 Oracle's (NYSE:ORCL) grew 10 bps to 5.9%, with engineered system growth offsetting declines for older UNIX/SPARC server lines. #5 Cisco (NASDAQ:CSCO), which recently proclaimed its UCS server ops are on a $3B/year run rate, saw its share rise 140 bps to 5.8% on the back of 35% growth. Cisco should pass Oracle in a quarter or two.
- ODM Direct vendors saw their share grow 110 bps to 6.6%. The shares of all other vendors rose 190 bps to 16.1%.
- Related tickers: SMCI, MLNX, QLGC, ELX
Aug. 4, 2014, 9:41 AM
- Barclays has upgraded InfiniBand switch/adapter market leader Mellanox (MLNX +2.5%) to Equal Weight, and downgraded Fibre Channel switch/adapter leaders QLogic (QLGC -1.3%) and Emulex (ELX -6.3%) - the former to Equal Weight, and the latter to Underweight.
- All three companies also have a presence in the data center Ethernet switch/adapter space. Barclays is optimistic about Mellanox's improving business trends, and worried about the impact of a declining Fibre Channel market on QLogic and Emulex.
- Mellanox rallied 10 days ago after providing strong Q3 guidance to go with in-line Q2 results, and providing upbeat commentary on demand from both HPC and non-HPC markets. QLogic plunged after guiding for a Q/Q gross margin drop (caused by a mix shift towards Ethernet products) to go with an in-line revenue forecast. Emulex reports on Thursday.
Jul. 25, 2014, 12:45 PM
Jul. 25, 2014, 9:53 AM
- Though Q2 revenue was only in-line, Mellanox (NASDAQ:MLNX) guided on its CC (transcript) for Q3 revenue of $114M-$118M, largely above a $114.4M consensus.
- CEO Eyal Waldman states Mellanox expects 2H14 growth from both its core HPC market (still half of revenue), and from storage and Web/cloud use cases. Design wins for EMC's new VMAX3 high-end storage systems - they use a 56-gig Mellanox InfiniBand interconnect - will help with storage growth.
- As expected, Mellanox expects the 2H launch of Intel's Grantley Xeon CPU to boost HPC-related demand; other Intel efforts still pose a long-term threat, but Mellanox doesn't expect an impact before 2016. It's also upbeat about the launch of 100-gig InfiniBand switches and adapter cards.
- IBM was the only 10%+ customer in Q2, accounting for 11% of revenue. 56-gig InfiniBand products made up 50% of revenue, 40-gig InfiniBand 15% of revenue, and Ethernet 19% of revenue. Mellanox is counting on the Integrity Project acquisition to strengthen its position in an Ethernet market where its share is still limited.
Jul. 25, 2014, 9:13 AM
MLNX vs. ETF Alternatives
Mellanox Technologies Ltd designs, manufactures and sells interconnect products and solutions that facilitate data transmission between servers, storage systems and communications infrastructure equipment and other embedded systems.
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