A clean beat-and-raise, record data center strength, and a newly expanded Alphabet Inc. (NASDAQ:GOOGL) Google partnership should have helped Marvell Technology Inc. (NASDAQ: MRVL) win a major boost from Wall Street. Yet, shares fell more than 8% anyway.

On August 28, Oppenheimer raised its price target on the stock to $325 from $300 while maintaining an Outperform rating. His note serves as a bull case that explains why the selloff was wrong, while the market reaction serves as the bear case for why it wasn't.

Why Oppenheimer Reiterated Outperform

Several factors led Oppenheimer to raise its price target and reiterate its Outperform rating. For starters, Marvell's revenue rose 37% to $2.7 billion, $39 million above the company's guidance. The firm noted that the company has raised its calendar year 2026 revenue outlook to $12 billion, up from $11.5 billion last quarter. Marvell now anticipates calendar year 2027 revenue of $18 billion, up from its $16.5 billion outlook in May and $15 billion in March.

A majority of this raise is driven by interconnect products, while the rest is driven by custom chip programs. Its Trainium and Maia programs also remain on track, with Maia likely to contribute $700 million in revenue next year. The quarter highlighted strong AI-related demand across the company's data center portfolio, with data center representing 79% of total revenues.

Speaking of the Google-Marvell expanded partnership announced recently, the firm noted how the full vesting of warrants would imply roughly $120 billion in cumulative Google purchases over an estimated seven years if milestones are met.

The partnership will likely average roughly $25 billion per year from calendar year 2028 through 2033, with material upside starting in 2028.

Google-Marvell Partnership Led the Selloff

The Google-Marvell partnership was the most likely cause of the selloff. While investors were waiting for some exciting news and numbers related to the deal, they were quite disappointed when they realized that the financial impact will take longer to materialize.

While investors know that the expanded Google opportunity could back substantial long-term revenue and EPS, the timing of this potential $120 billion figure is worrying investors, as well as the fact that the figure is a warrant vesting ceiling, not a confirmed figure.

For now, management has deferred its specific long-term financial guidance and structural details of the transaction directly to its October 6 event.

The beat-and-raise were not all that impressive either. Given the massive hype surrounding the stock and a valuation that demanded a flawless print, the Q2 numbers failed to impress Wall Street. Its revenue of $2.74 billion narrowly beat expectations of $2.71 billion, while adjusted earnings of 94 cents per share was also close to expectations of 93 cents per share.