Last week’s massive Outlook outage was a gift to office workers everywhere hoping for a bare-minimum Friday. For Microsoft, the timing was hardly ideal.

Shares of the tech giant had already taken a bit of a beating last week after Anthropic debuted a suite of new AI-powered office tools seemingly designed to challenge Microsoft’s bread-and-butter products. Then came the outage that impacted more than 430 million users around the world. The good news for Microsoft? Its annual Ignite conference in San Francisco this week is the perfect time to prove to investors that it’s still a top beneficiary of the AI movement. Here’s hoping the outage didn’t derail any last-minute event planning.

Long Day’s Journey to Ignite

As gleeful as the average office drone may have been to dodge answering Teams messages and emails for a day or two, the Outlook outage caused some serious damage. Communications went down at several National Health Service hospitals in the UK. Ditto at shipping giant Maersk. For once, members of the US House of Representatives’ inability to communicate with one another was due to literal complications. DownDetector counted problems among users in more than 70 countries. An estimate from credit ratings firm Morningstar DBRS said insurance payments to impacted organizations could total $500 million. Microsoft said the outage was a technical issue and not due to a hack or other malicious cyber behavior.

But the ill-timed blemish won’t shake Microsoft’s reputation as a favorite among Wall Street’s bulls. Shares of the company climbed to a record high earlier this month in the days after an encouraging earnings report, with its massive cloud business representing the “cleanest demand proxy for enterprise AI,” Yorkville Ives analyst Dan Ives wrote last month. Last week, two more Wall Street analysts chimed in predicting the Ignite conference will spark even more momentum:

• “Microsoft is back in favor with investors following another better-than-expected quarter, with accelerating growth and strong operating leverage providing incremental confidence in its ability to monetize the ongoing AI investment cycle,” Morgan Stanley analyst Adam Wood wrote in a note.
• “Ignite provides an opportunity to reinforce conviction in the durability and breadth of [accelerating] growth,” Wood added. That echoed the sentiment of Citi analyst Tyler Radke, who wrote the event will likely reinforce confidence in Microsoft’s AI growth narrative.

Tip of the Cap: The momentum did help Microsoft briefly surpass Nvidia to become the world’s second-largest company by market cap (comfortably in the Number One spot, for now, remains Apple). Of course, that has just as much to do with Nvidia’s epic $1.6 trillion valuation wipeout, which began even before its CEO became embroiled in one of the decade’s most eye-catching scandals.

Nvidia’s now former CEO Jensen Huang could run an aviary with all the cans of worms his cheating scandal has opened up. One that seems particularly slimy: the thriving enterprise that is Chinese chip smuggling.

The Justice Department is probing any connections between chip-smuggling efforts made by San Jose-based Super Micro Computer and entities tied to Jensen Huang’s reported affair partner, Alice Huang (no relation), as well as her former company Megaspeed International. US prosecutors in March charged one of Super Micro’s co-founders and two other people with conspiring to smuggle about $2.5 billion worth of Nvidia chip-filled servers into China.

A lot of details are still up in the air. Alice Huang’s role is unclear and Megaspeed has denied any wrongdoing. What is clear is that any attempts to smuggle chips into China will now be under a harsh spotlight that won’t dim anytime soon.

Out of Pocket

Jensen Huang has previously dismissed the idea that any of Nvidia’s advanced chips are being spirited away to China. “There’s no evidence of any AI chip diversion. These are massive systems,” he said last year. “The Grace Blackwell system is nearly two tons, and so you’re not going to be putting that in your pocket or your backpack any time soon.”

But shoving chips in an oversized trench coat is an oversimplification of how recent reports lay out the chip-smuggling chain of events:

• Singapore-based Aperia Cloud Services purchased servers from Dell containing Nvidia’s H800 chips, advanced GPUs that the US restricted from being sold to China in 2023. Bloomberg used the servers’ serial numbers to confirm they were the ones Dell sold to Aperia, then found they’d wound up at a Shanghai AI data center in the hands of a Chinese company that (here’s the kicker) Alice Huang founded.
• A network that Huang seems to be at the center of didn’t stop its smuggling at that batch of H800s: financial documents filed by Shanghai Longteng Intelligent Computing, which Alice Huang set up a decade ago, detail hardware worth about $73 million.

Dell said it stopped doing business with Aperia, which has denied any wrongdoing, in February last year over “unauthorized diversion concerns.” That month, Singapore officials arrested Aperia’s CEO on fraud charges. Nvidia said Aperia stopped being an active customer before then.

Sealing Up Cracks: President Trump reauthorized a crackdown (his third, by our count) on advanced chip exports to China last week. The escalation of the chip wars could be a major blow to a Chinese AI industry that has had unfettered access to the latest Nvidia architecture until now. But there may also be repercussions for American tech companies, especially the ones that have come to depend on made-in-China open-source models.

If Wall Street white collars are feeling a tad less tight lately, it must be the absence of regulatory heat.

The Securities and Exchange Commission, the financial industry’s top regulator, took the fewest actions against public companies in at least a decade and a half in the most recent fiscal year, according to new data.

Lights, Camera, Less Enforcement Action!

SEC Chair Paul Atkins was nominated by President Donald Trump last year on the expectation that he would take a light-touch approach to enforcement and regulation. Since being confirmed by the Senate in April 2025, he has moved to do away with quarterly reporting requirements, expand 24/7 trading and make it easier for crypto firms to raise money through token sales.

His latest move came Friday, when the SEC announced it wants to relax executive compensation disclosure requirements for publicly traded companies. Under proposed new rules, most companies would have to disclose the pay packages of just two executives, down from five, and wouldn’t have to report workplace perks totaling less than $150,000, compared to the current $10,000 threshold. Atkins said these changes “are central tenets of my agenda and focus on transforming the SEC’s public company disclosure regime to one rooted in materiality.”

In addition to favorable rule changes, the latest annual analysis of SEC enforcement activity by Cornerstone Research and the NYU Pollack Center for Law and Business shows the Wall Street watchdog has been more puppy-like when it comes to enforcement under Atkins:

• The SEC brought just 16 actions against public companies and subsidiaries in the fiscal year ended Sept. 30, the fewest since Cornerstone and NYU began tracking data in 2010 and a 71% decline from FY 2025. The $184 million in penalties obtained from these actions also marked the lowest level since at least 2010, more than $600 million less than in the 2025 fiscal year.
• Not one defendant had an admission of guilt for the first time since 2021, compared to an average of 21 from 2022 to 2025. “The decline in both enforcement actions and monetary settlements was broad and significant,” Stephen Choi, the NYU law and business professor who co-authored the report, said. “But based on Chair Atkins’s statement that the SEC will emphasize quality enforcement over quantity, these results are not entirely surprising.”

The SEC published its own enforcement data last week, which includes actions against private companies and individuals. The 348 enforcement actions it filed were about half the SEC average of the last decade, and the $1.1 billion in penalties obtained was the least since 2008.

Under the Microscope: The SEC may have to alter its Atkins diet when Democrats take control of Congress next year. Massachusetts Sen. Elizabeth Warren, who is set to chair the upper chamber’s Banking Committee, said she is concerned about a “precipitous drop in SEC enforcement against Wall Street crooks” and that “the new Democratic majority in Congress will closely scrutinize whether the Atkins SEC is protecting the American people.”