UPDATE: Stifel Nicolaus Upgrades Mellanox Technologies on Expectations, Valuation

In a report published Wednesday, Stifel Nicolaus analyst Kevin Cassidy upgraded the rating on Mellanox Technologies (NASDAQ: MLNX) from Hold to Buy, and named a $63.00 price target.

In the report, Stifel Nicolaus noted, “We are upgrading the MLNX shares to a Buy rating based on a combination of our expectations for an eventual rebound in the High Performance Computing market and the shares' valuation. While we have lowered our estimates to reflect slowed macroeconomics including government HPC spending in the near term, we believe demand for the highest performance networks can be stimulated with the launch of Intel's next generation, higher performance server processors later in 2013 and through 2014. Furthermore, we have been impressed with Mellanox' plethora of product launches despite a slowdown in end market demand. In our view, market leading management teams tend to use new products to stimulate end market demand. We believe Mellanox is positioned to outperform the market as demand returns.”

Mellanox Technologies closed on Tuesday at $48.97.