Microsoft’s transition into cloud-based technology opens up new, lucrative markets for the software giant, according to Atlantic Equities, which gave its stock an overweight rating.
The company’s recent organizational changes to better capitalize on its cloud computing business — known as Azure — is set to be a key profit driver, analyst James Cordwell told clients in a note Monday. The firm's previous rating under another analyst was neutral.
“Azure has replaced Windows as the platform underpinning Microsoft's enterprise offering, and we forecast it exceeding $100 billion revenue over the next decade,” Cordwell wrote. “With Office 365, Microsoft has already established a strong position in the software as a service market and there remains robust growth potential as the greater accessibility of the cloud delivery model continues to drive expansion in the user base and customers steadily upgrade from basic packages.”