Microsoft's (MSFT) - Get Report two-day judicial bender is over, leading its dry, reddened eyes to survey the sober market landscape anew. After a brief recess for court, it's back to our regularly scheduled Microsoft grief.

It's up to the seven-judge appellate court panel over the next two to three months to determine Microsoft's legal fate, but investors can rule immediately on the software giant's stock market potential. Two days of argument are behind us, and the Street is left to decide whether Microsoft's stock is in the dumps because of breakup fears or because of a crippling PC-sales slowdown that has yet to be balanced out with less mature server-market efforts.

Beating the pundit bushes, it's obvious that experts see little chance of Microsoft being carved in half. As a guest of

Prudential Securities

, Professor William Kovacic of

George Washington University

told investors that the harassment by

Judge Thomas Penfield Jackson

and his court's inability to define a discreet browser market that Microsoft had squelched led him to believe there was a 100% probability Microsoft would avoid a breakup. Kovacic stressed that lesser, so-called conduct-related remedies could be prescribed. He put the odds at 25% that the

U.S. Court of Appeals for the District of Columbia

would abandon Judge Jackson's findings of fact altogether because of his misconduct.

Microsoft stays intact, basically. What then?

Lucky Microsoft gets to forge ahead with an operating system monopoly for PCs, a sector whose growth

suddenly halted in the past two quarters. Half-full cup-holders consider the 2001 operating system and productivity suite upgrades, Windows XP and Office XP, a real enticement for PC users. Half-empties shrug their shoulders, insisting it isn't enough. "XP's the next step in the evolution of the software. Is it this revolutionary new thing? No," says analyst Melissa Eisenstat of

CIBC World Markets

. Eisenstat slaps a $66 price target on Microsoft. "They need to show more momentum in their core businesses," she says. CIBC World Markets hasn't done banking for Microsoft and has a buy rating on the stock.

High-profile bets in the server and services market have stolen lots of headlines lately, but are unlikely to jar the stock. Last year Microsoft launched its most serious attack on the server market with Windows 2000, and there's been plenty of talk about the company's

Xbox entry into the video-game world. But in an information technology spending downturn that is quickly toppling business growth estimates across the technology landscape, those segments have to get big faster than they probably can.

Prudential analyst Doug Crook cautions against expecting a Microsoft revival to come from its newer pushes. "The cash cows in the business are Windows and Office. If you're going to see reacceleration in the numbers, Microsoft has got to stimulate demand there."

Sentiment is mixed when it comes to Microsoft's current stock price and whether the

Department of Justice's

antitrust action has flattened MSFT. Last March, Microsoft hit its current 52-week high of $115. Since then, it's been as low as $40.25 (Dec. 21), skidding in sync with the best of tech to its current price in the high $50s.

Christopher Mortenson, an analyst with

Deutsche Bank Alex. Brown

, has an $80 price target on Microsoft's stock over nine to 12 months and says, "The threat of breakup is something that's been depressing the stock for a while." He thinks Wall Street has factored in all the bad news facing Microsoft in a search for a suitable long-term growth expectation for the giant, but has yet to mix in positives such as the XP releases. (DB Alex. Brown has no current banking entanglements with the software giant and rates the company a buy.)

Prudential's Crook feels otherwise: "I think most institution portfolio managers have already discounted that the trial is not going to have an impact for a couple of years, maybe three years, maybe not at all," he says. He has a $55 price target on Microsoft and a hold rating, with no banking entanglements.

What is uniform on Wall Street is the need to see some progress from Microsoft, despite the tough economic conditions. "Right now, what moves the stock? People are so nervous about the economic environment, they want to see the economy improving or a March quarter from Microsoft that indicates that the economy isn't making things worse," Mortenson says.

It seems it's up to Microsoft to grab hold of its own destiny and revive its prospects, after all.