Microsoft's Cloud business has been going much better since Satya Nadella replaced Steve Ballmer as the company's CEO.
Analysts even expect the company's upward trajectory to continue and reach a value of $1 trillion.
Evercore researchers Kirk Materne, Fenn Hoffman, Tom Mao and Daniel Greenfield expect this to happen as early as 2020 or by the end of fiscal year 2021, and they say Microsoft Office 365 and the Azure public cloud will be the main catalysts for the company's $1 trillion valuation.
Office 365 will generate about $5.18 billion for the company, with the productivity suite generating a total of $26.86 billion by fiscal year 2021.
Microsoft Azure will continue to grow in the coming years and in 2021 it should achieve revenue of $22.19 billion, according to analysts.
“Microsoft with 365 will win with the ease of integrating the product into the broader Office productivity platform and the insistence of business customers to buy product “suites” over better solutions, especially in the small business market where resources are limited,” the analysts say.
“As Azure revenue is invested in infrastructure projects, we believe Azure has the potential to drive significant operations over the next 4 years and become a segment that will drive much of Microsoft’s core profits over the next decade.”
Microsoft, however, will not be the first technology company to hit $1 trillion, as Apple is very likely to do the same and much sooner.
Apple had predicted it would surpass the $1 billion milestone by the end of the year, but analysts expect that to happen in 2018.
The company has reportedly been close to that value since early November following the launch of the iPhone X, as its stock price rose 3%. This brought the company's valuation to (roughly) $900 billion for the first time.
