This article was originally published on ETFTrends.com.
Nvidia will acquire Mellanox in an all-cash offer of $125 per shares or a premium of 14% to the Israeli company's Friday close, CNBC reports.
“The data center has become the most important computer in the world,” Nvidia CEO Jensen Huang told CNBC. “The thing that’s really exciting is that the computer no longer starts and ends at the server. The computer in the future would extend into the network. ... And what we want to do is, we want to extend our computing reach from the server, where we are today, out to the entire data center.”
Mellanox, which is based in Israel and the United States, produces semiconductor chips and other hardware for data center servers that power cloud computing.
Bernstein analyst Stacy Rasgon said Nvidia has been expanding into networking and connectivity with its own custom solutions, and Mellanox would provide further expertise in Nvidia's current businesses.
“But going out and buying an asset right now, immediately after the recent spate of guide downs may raise a few eyebrows,” Rasgon told CNBC. “It will probably spark questions as to whether NVDA sees anything changing regarding the growth trajectory of their core datacenter business.”
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