Friday, January 4, 2013

Investopedia: Have We Seen The Worst For Mellanox?

In a year that was generally pretty tough for most semiconductor-related stocks, Mellanox (Nasdaq:MLNX) spent most of the year as a notable exception, with strong data center/storage demand feeding torrid growth. With that growth high valuations and high expectations came, but the stock spent most of the last quarter of 2012 selling off.

Now, the other shoe has dropped. Mellanox not only warned the Street that fourth quarter results would come in below expectations (the first-ever warning), but the magnitude of the miss was startling. With the shares crushed in aftermarket trading, the debate now is whether this is an overreaction to a small stumble from a high-growth company, or whether this marks the beginning of some serious challenges to this highly-valued stock.

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