How the Mellanox Deal Will Boost Nvidia's Bottom Line

Katherine Ross

Let's talk Nvidia.

TheStreet's Bret Kenwell weighed in on why Nvidia's purchase of Mellanox makes Nvidia a long-term buy, and Jim Cramer and his team at Action Alerts PLUS have a position in Nvidia.

So, what's appealing about this stock?

"Here’s the thing. When the deal was announced, both of these stocks rallied. That’s because the synergies were very clear to Wall Street and the deal was an obvious benefit to Nvidia. The company didn’t overpay, while Mellanox would make it a more profitable entity," wrote Kenwell. "For long-term shareholders, that’s music to their ears. But that doesn’t mean the market will care in the short term. With the S&P 500 rallying 30% from its March lows, we could be ripe for a pullback. If that’s the case, Nvidia may be susceptible to selling pressure as well."

Take a look at Kenwell's analysis here.

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