Microsoft shares have risen 23 percent since the beginning of the year, while the Standard & Poor's 500 index has risen 17 percent.
"Leading organisations of every size in every industry trust the Microsoft cloud". "Most investors seem to think that Azure will evolve similar to AWS (Amazon Web Services), expanding margins with scale".
Latest results for the third quarter to the end of March showed revenues up 14% to $30.6bn (£24bn) and profit 19% higher at $8.8bn (£6.8bn).
At the Intelligent Cloud division, which includes Azure and other enterprise cloud services, revenues rose 22 percent to Dollars 9.65 billion, and operating profit was up 21 percent to USD 3.21 billion.
Microsoft has three reporting segments: Productivity and Business Processes (covering Office, Exchange, SharePoint, Skype, Dynamics, and LinkedIn), Intelligent Cloud (including Azure, Windows Server, SQL Server, Visual Studio, and Enterprise Services), and More Personal Computing (covering Windows, hardware, and Xbox, as well as search and advertising).
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Microsoft posted fiscal third-quarter earnings of $8.8 billion US, up 19% from the same period a year ago. Microsoft reported gross margins of 66.7 percent, a marginal increase to the 65.4 percent reported previous year. As expected, the transition to delivering software as internet service was not easy, and the company had to endure a dry period as it expanded its user base.
On the other hand, consumer products also performed particularly well, with total revenue of $10.7 billion and an increase of 8 percent.
Surface revenue increased 21 per cent (up 25 per cent in constant currency).
Microsoft shares rose as much as 5% in early trading on Thursday, briefly pushing its market value above $1tn (£775bn) for the first time before dipping back below again when the shares price gain eased. From the latter, the biggest victor was in revenue from the company's Surface hardware arm at a 21 percent gain, with Windows commercial products and related cloud services growing 18 percent. Commercial sales of the company's cloud application surged by 30 percent. The gaming market is expected to decrease year-over-year, however, due to fierce competition from popular online games like Fortnite, Microsoft said on its earnings call.
Microsoft's share price has increased steadily this year.