Microsoft (NASDAQ: MSFT) shares rise 3.4% to $145.50 premarket, after company wins the Pentagon's $10 billion cloud computing contract.

- The Joint Enterprise Defense Infrastructure Cloud (JEDI) contract is part of a broader digital modernization of the Pentagon meant to make it technologically more agile.

- MSFT was chosen for the contract over U.S. Defense department (DoD) favorite Amazon.com Inc (NASDAQ: AMZN)

- Brokerage Wedbush expects Amazon and others to challenge this decision in the courts, but ultimately this is a paradigm changer for Microsoft

- This deal adds at least $10/share to MSFT's stock and could have significant positive financial implications for the company over the coming years - Wedbush

- Shares of Amazon fall -1.1% to $1,742.50 premarket

- As of Friday's close, MSFT shares had gained 38.6% this year and were the second best performer on the blue-chip Dow Jones index <.DJI>

(Reporting by Shreyashi Sanyal in Bengaluru)

Reuters