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Why Did Microsoft (MSFT) Stock Climb Today?

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Shares of Microsoft (MSFT - Free Report) popped over 2.2% on Tuesday to inch closer to their all-time high on the back of several significant announcements, including a Supreme Court ruling that ended a dispute between Microsoft and the U.S. Department of Justice.

Supreme Court

The Supreme Court dropped a case from its docket on Tuesday that aimed to rule whether emails and other data stored overseas are subject to U.S. search warrants. This case originally focused on Microsoft after it pushed back on the Justice Department when asked to turn over emails from an account reportedly tied to illegal drug activity.

Microsoft stored these emails in Ireland, and therefore the technology giant determined that they were not subject to U.S. search warrants. The Justice Department contended that its warrant was valid because Microsoft is based in the U.S.

The Supreme Court ruled that this case is now moot because Congress recently passes a new law that gives law enforcement agencies access to data that is stored overseas.

“We welcome the Supreme Court’s ruling ending our case in light of the Cloud Act being signed into to law,” Microsoft president Brad Smith said in a company statement. “Our goal has always been a new law and international agreements with strong privacy protections that govern how law enforcement gathers digital evidence across borders.”


Tuesday also saw Microsoft join Facebook (FB - Free Report) , Oracle (ORCL - Free Report) , and some 30 other technology giants in a joint pledge to combat cybersecurity threats as the global prevalence of attacks grows.

The announcement of the new Cybersecurity Tech Accord was made at the RSA Conference—a global digital-security summit—in San Francisco. The new cybersecurity accord vows that the companies will not help any government, including the U.S., in waging cyberwarfare on “innocent citizens and enterprises.”

The pledge’s four principles are: “protect all of our users and customers everywhere; oppose cyberattacks on innocent citizens and enterprises from anywhere; empower users, customers and developers to strengthen cybersecurity protection; partner with each other and with like-minded groups to enhance cybersecurity.”

Notably left off the list are U.S. tech powers, Amazon (AMZN - Free Report) , Apple (AAPL - Free Report) , Alphabet (GOOGL - Free Report) , and Twitter (TWTR - Free Report) .


Microsoft also grab investor attention late Monday after the company announced that it would begin to use software based on the Linux operating system to improve some of its security features. The company turned to its former rival in order to embed Linux security tech in a new design for a chip it will use in appliances, industrial machinery, and an array of other internet-connected devices.

This move comes after a wave of cyberattacks exposed just how underprepared some companies, big and small, are to modern digital security concerns. Many experts see this move as the latest signal that Microsoft, under the leadership of CEO Satya Nadella, is ready to move on from the Windows era.

The company will need to bolster its cybersecurity as it aims to expand its cloud computing business and jump further into the world of connected devices.

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