Microsoft reported adjusted revenue and profit that blew past analysts’ estimates on Thursday, as soaring sales from its cloud business pushed the technology giant’s shares to an all-time high.
The news underscores the dramatic yet still early shift of businesses switching to cloud services after long relying on software programs and other hardware.
Shares of Microsoft rose 6.1 percent to $60.73 in after-hours trading, adding more than $27 billion to its market value.
The Redmond, Washington-based company said revenue from its flagship cloud product Azure, which businesses can use to host their websites, apps or data, rose 116 percent.
“There’s a huge runway for them to show growth,” said Trip Chowdhry, managing director of Global Equities Research, noting the market for cloud services will be controlled almost entirely by Microsoft and larger rival Amazon.com Inc.
Early investment in the cloud, coupled with machine learning and applications that can scale at different levels, have set those companies apart from smaller rivals – and precipitated the decline of older software companies, Chowdhry said.