Mellanox Technologies, Ltd. (NASDAQ:MLNX) is a provider of high speed networking switches and related equipment. Its products serve two general markets with Infiniband products, typically used for “high performance” computing applications, and its standardized Ethernet products, used for general networking applications. We believe that, combined with the recent acquisition of EZChip (which produces specialized network protocol chips that help direct data traffic), Mellanox has a very strong technology market position. Shares were weak in the quarter due to concerns that Intel is incorporating Infiniband networking functionality in its own chips. While we account for some share loss in the company’s high performance markets, Mellanox is just starting its Ethernet penetration, and we believe that increased growth in Ethernet will more than compensate for this competitive threat. We believe shares are inexpensive, particularly after expected accretion on the EZChip deal, and we believe there is a lot of growth ahead for the company.
From Baron Discovery Fund's second quarter 2016 commentary.
