Why Microsoft Stock Topped the Market Today

What happened

Like many big companies, Microsoft (NASDAQ: MSFT) likes to grow even larger by acquisitions. The pace of the software giant’s asset buys has slowed of late, but it’s still got its eyes on attractively valued prizes. On Monday the company announced its latest acquisition, and investors greeted the news by trading Microsoft stock up by 1% to top the essentially flat S&P 500 index.

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So what

Confirming rumors that had been floating around the tech space for several weeks, Microsoft announced on its official blog that it acquired Fungible. The formerly privately held company specializes in data processing units (DPUs), a type of hardware frequently deployed for use in data centers.

The company was founded by onetime Apple software engineer Bertrand Serlet in 2016. Fungible’s core product, the Fungible DPU, was also invented that year.

In its post, Microsoft did not specify how much it paid for Fungible. Media reports in December speculated that the tech giant parted with around $190 million to buy the company.

Now what

The post did state that the deal

further signals Microsoft’s commitment to long-term differentiated investments in our data center infrastructure, which enhances our broad range of technologies and offerings including offloading, improving latency, increasing data center server density, optimizing energy efficiency and reducing costs.

Data centers, which as their name implies are facilities that store large amounts of data, are crucial to the modern IT operations of corporations. Although the Fungible acquisition is rather small compared to the overall size of Microsoft, it’s an encouraging sign that the company is paying proper attention to, and servicing, its proprietary data center needs.