Analysis of NVIDIA's Acquisition of Mellanox Tech-nologies, Ltd. Based on PEG and EVA Valuation Model

Abstract

The docking of AI and industrial applications still requires software algorithm optimization and threshold lowering, the variety of real-world application scenarios is limited, and the maturity of new scenarios is still low. All of these issues still exist in the AI business in 2019. The globe started integrating technology and conducting chip research and development. Enterprises frequently run across obstacles in the areas of capital, technology, and management when they are trying to grow their operations. Businesses frequently opt for bond issuance, stock market listing, mergers & acquisitions, and other strategies to broaden the area of operations, modernize the management style, and boost competitiveness to address these issues. Based on PEG and EVA valuation models, this study examines the goals and outcomes of NVIDIA's M&A team for the largest M&A transaction in NVIDIA's history. It is determined that the M&A behavior was effective by comparing the valuation of NVIDIA's share price before and after it engaged in M&A activity. According to the PEG and EVA valuation models, it is discovered that NVIDIA's share price is marginally overvalued following the merger and acquisition.