What happened

Shares of Microsoft (MSFT 1.82%) rose by as much as 2.8% Wednesday morning before settling into a 1.6% gain as of 1:35 p.m. ET.

Microsoft investors have gotten no less than least three pieces of good news over the past two days. First, the company's pending acquisition of Activision Blizzard (ATVI), thought to be in danger of being blocked, was given new life Tuesday, thanks to a judge's favorable ruling.

Amid all the news over the Activision bid, an announcement of new cybersecurity products Tuesday might have gotten lost in the shuffle. But it likely increased investor optimism over Microsoft's prospects in this high-growth market.

And finally, most growth stocks got a boost on Wednesday after June's Consumer Price Index (CPI) report showed lower-than-expected inflation across the board.

So what

On Tuesday, U.S. District Judge Jacqueline Scott Corley declined the Federal Trade Commission's request for a restraining order that would have prevented the Activision Blizzard deal from closing on July 18.

"The FTC has not shown it is likely to succeed on its assertion the combined firm will probably pull Call of Duty from Sony PlayStation, or that its ownership of Activision content will substantially lessen competition in the video game library subscription and cloud gaming markets," the judge wrote in her decision.

Prior to this ruling, the deal was thought to be in high danger of not going through. And while Microsoft still faces an antitrust lawsuit from the FTC, the odds of Microsoft closing the deal have greatly improved, as was evidenced by the fact that Activision's stock soared Tuesday.

Adding the massive video game developer to its portfolio would be a positive for Microsoft, as it brings with it several well-known franchises likely to deliver high-margin revenue for years to come. Microsoft's gaming segment has often been something of an afterthought for shareholders, but this deal will make it a more significant piece of its growing empire.

In addition, late on Tuesday, the company announced a pair of new cybersecurity products: Entra Internet Access, a new secure web gateway; and Entra Private Access, a new zero trust network access platform. Combined with Microsoft Defender for cloud access, the new end-to-end offering will be called Microsoft's Security Service Edge (SSE) solution. In addition, the company highlighted a number of new security capabilities within the overall Entra platform.

At a time when more businesses are looking to consolidate vendors and bundle offerings to cut costs, Microsoft is in a great position as an incumbent with a toehold in many organizations, thanks to its enterprise software and cloud offerings. As evidence of the optimistic outlook for Entra, other leading cloud security stocks such as Palo Alto Networks, CrowdStrike, and Zscaler were down significantly Wednesday.

Finally, Microsoft likely also got a boost from Wednesday's release of June inflation data. For the month, the CPI rose only 3% year over year and 0.2% month over month, both better than the 3.1% and 0.3% expected. Meanwhile, the core inflation rate (which strips out volatile food and energy prices) was 4.8% year over year and 0.3% month over month, also better than expectations.

These lower readings would indicate that inflation continues to slacken. And given the strong last few jobs reports, it now seems more likely that the Federal Reserve will be able to ease inflation back down to its target range of around 2% without causing significant U.S. job losses or economic damage. As Microsoft is a relatively high-multiple stock -- it trades now at a price-to-earnings ratio of 36.5 -- it would definitely benefit from milder inflation, and lower interest rates that would discount its future profits by a lower amount.

Now what

While Microsoft stock certainly isn't cheap, it may offer the best combination of safety, stability, and growth in the market right now. With a portfolio of high-margin businesses across enterprise software, cloud infrastructure, PC operating systems, and now a potentially more robust consumer gaming franchise, Microsoft offers investors many ways to profit.

And with its current lead in artificial intelligence (thanks to its investment in OpenAI, the parent company of ChatGPT), Microsoft's upside may even be underrated by investors.