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Mellanox InfiniBand Selected by HLRS to Boost Supercomputer

Zacks Equity Research

Mellanox Technologies, Ltd. MLNX recently won a contract from the High-Performance Computer Center of the University of Stuttgart (“HLRS”) for an undisclosed amount.

Per the deal, the company has been selected for its HDR 200 gigabit InfiniBand solutions to accelerate HLRS Hawk supercomputerin order to attain robust high-performance computing (“HPC”) and artificial intelligence (“AI”) application performance, scalability and efficiency.

Hawk is a 5000-node supercomputer which will be built in 2019 and yield 24 PetaFLOPs compute performance.The InfiniBand solutions will aid the mission of the HLRS to expand its applications performance in the Areas of Energy, Climate and Health.

InfiniBand is highly scalable and its off-loading capabilities that reduce load on CPUs are attracting AI, machine learning and deep learning providers. The company had recently released HDR 200 gigabit InfiniBand, which enhanced its competitive advantage in the AI market. It was also selected by Texas Advanced Computing Center (“TACC”) to improve the performance and efficiency of Frontera, which is ranked among the top five fastest supercomputers in the world.

The addition of InfiniBand to HLRS’s latest high-end HPC platform boosts the systems processing performance and scalability. The enhanced features enable the system to tackle computational problems related to the emerging field of AI, and subsets machine learning and Big Data analytics.

According to the vice president of marketing at Mellanox “We are excited to work with HLRS on building the next generation of supercomputers on the path to Exascale, a platform that will serve the growing computing needs of their large community.”

Price Performance

Shares of Mellanox have gained 29.7% in the last year, against the industry’s decline of 13.4%.

InfiniBand Implementation Remains Sturdy

HLRS’s choice of utilizing InfiniBand reflects rapid adoption of the interconnect solution. Mellanox stated that InfiniBand connected six times more new HPC systems on the TOP500 than Intel’s OmniPath. Further, its adoption is commendable as the largest supercomputers in China, Japan and Canada, all utilize InfiniBand. In fact, the upcoming largest supercomputer in the United States also utilizes InfiniBand..

InfiniBand-based products contributed 35% of total revenues during the second quarter. Market research firm IDC forecasts that by 2025, the global datasphere will grow to 163 zettabytes (that is a trillion gigabytes), which is 10 times the 16.1 zettabytes (ZB) of data generated in 2016. This exponential growth of data bodes well for Mellanox’s interconnect solutions due to growing demand for higher network speeds for rapid processing of data.

Furthermore, the company has won contracts from the likes of NetApp, the University of Toronto and NASA Ames Research Center, which reflects strong demand for its solutions.

The University of Toronto also selected the Mellanox InfiniBand solutions to accelerate its new leading supercomputer in Canada. Previously, the NASA Ames Research Center selected the company’s EDR InfiniBand solutions along with HPE SGI 8600 liquid cooled platform to expand its “Electra” supercomputing cluster.

Additionally, Mellanox’s collaboration with Microsemi Corporation is expected to reinforce the company’s footprint in the high performance computing market, going forward.

Zacks Rank & Stocks to Consider

Currently, Mellanox carries a ZacksRank #3 (Hold).

Some better-ranked stocks in the broader technology sector are ZAGG Inc ZAGG, Marvell Technology Group Ltd. MRVL and Infineon Technologies AG IFNNY, all flaunting a Zacks Rank #1 (Strong Buy). You can see the complete list of today’s Zacks #1 Rank stocks here.

Long-term earnings growth rate for ZAGG, Marvell and Infineon Technologies is currently pegged at 7.5%, 9.4% and 8.6%, respectively.

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