believe that at this point and given that there have not been meaningful deployments of intel’s product, the overall application performance of Omni-Path vs. Mellanox InfiniBand is unknown, but we continue to believe Mellanox’s technology is highly competitive. Valuation – Following 1Q results we make minor adjustments to our FY16 projections. We expect FY16 revenues to total $883 million, in line with our prior estimate ($769 million derived from MLNX and $114 million from EZchip) and Non GAAP EPS of $3.79 (slightly up from $3.78). For 2Q16 we expect consolidated revenue of $214.4 million (street $215.8 million) and Non GAAP fully diluted EPS of $0.88 (Street - $0.89). We reiterate our $60 price target which reflects 16x P/E to the Non-GAAP 2016E EPS estimate, implying approx. 20% upside from current levels (shares are down 5% in the aftermarket). We maintain Mellanox at a Buy rating as we continue to believe in its multiple growth opportunities that go beyond the HPC industry (with InfiniBand, Ethernet and EZchip product lines), in the short and long term. Main risks - 1) competitive risks - If Intel Omni-Path gains significant traction this might drive market share loss and pricing pressure and will have a negative effect on MLNX performance. 2) Ethernet Switching opportunities fail to materialize; 3) soft HPC market and a downturn in revenue cycle; 4) EZchip integration risk. Makor Securities Makor Capital Makor Capital Markets Makor Securities London Ltd. Rogovin Tower Makor Securities London Ltd Makor Securities London Ltd 7/8 Savile Row 2nd Floor Menachem Begin 11 (Geneva Rep Office) (Paris Rep. Office) London W1S 3PE, ENGLAND 52689 Ramat Gan, ISRAEL 27 rue de la Croix-d’Or 51 rue Francois Premier +44 207 290 5777 +972 3 545 3777 1204 Geneve, SWITZERLAND 75008 Paris, FRANCE +41 223 106 916 +33 1 42 99 69 41