The firm said it raised its rating on the fabless semiconductor company as it sees the next "18-24 months of tailwinds in the interconnect space driven by strength in the HPC industry, the Grantley server refresh cycle, data center and storage spending trends, strength in the 40G market and the eventual move towards 100G."
"We do expect increased competition in the interconnect space but we like Mellanox's position in the high end niche where we believe the benefit will materialize," Barclays added.
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The firm has a $57 price target on Mellanox stock, up from $50.
Separately, TheStreet Ratings team rates MELLANOX TECHNOLOGIES LTD as a Hold with a ratings score of C. TheStreet Ratings Team has this to say about their recommendation:
"We rate MELLANOX TECHNOLOGIES LTD (MLNX) a HOLD. The primary factors that have impacted our rating are mixed some indicating strength, some showing weaknesses, with little evidence to justify the expectation of either a positive or negative performance for this stock relative to most other stocks. The company's strengths can be seen in multiple areas, such as its increase in net income, revenue growth and largely solid financial position with reasonable debt levels by most measures. However, as a counter to these strengths, we find that the company's return on equity has been disappointing."