The appeals court has twice overturned the judge in this case, so I think investors are optimistic that this case could be significantly modified or overturned on appeal.

Might put a somewhat more favorable spin on the news and give investors some more tangible basis for optimism.

We have spoken with management and there are currently no plans for an pre-announcement, as business appears to be tracking in line with expectations.

It shows that they get it.

The results were above our estimates, which had been reduced during the quarter given evidence of slowing PC demand.

Significant bad news may likely already be reflected in the stock.

We are encouraged by this and have raised estimates, essentially back to earlier levels. While the stock is richly valued and the growth is still well below historic levels, we believe there is a good flow of upcoming new products and the shares are likely a relative safe harbor.

Microsoft cannot easily be broken up. It is a unitary company with one management team, one headquarters, one set of sales and marketing offices, one sales force, one product support organization, one basic research unit, etc.

Intel's pre-announcement will likely raise questions about the strength of Microsoft's March quarter.