MLNX - Nvidia: The Acquisition Of Mellanox Increases Risks
Nvidia (NVDA) announced the acquisition of Mellanox (MLNX) for an enterprise value of $6.9 billion. Although the deal expands Nvidia's portfolio in the data center segment, medium-term synergies are limited. The competition with Intel (INTC) will increase. And Nvidia will start competing with other dominant strong players like Cisco (CSCO) and Arista (ANET).
Beyond these challenges, the acquisition is a long-term bet on the integration potential between the GPU and the interconnection technologies of the two companies.
Considering the uncertainties of achieving such a long-term