To what extent can Microsoft Corporation (MSFT) drive higher cloud growth to lessen its dependence on personal computer sales? This was the main question heading into Tuesday's fourth quarter fiscal 2016 earnings results.

Although Microsoft has made great strides to compete with Amazon.com, Inc.'s (AMZN) dominant AWS cloud platform, growth in Microsoft's Azure cloud service had begun to decelerate. But Microsoft answered the call on Tuesday, and then some.

The Redmond, Wash.-based company said that usage in the Azure cloud, which grew 102% year-over-year, more than doubled last year, helping to offset weakness in both its Windows franchise and its fledging mobile-phone unit. This was enough to send Microsoft shares soaring as much as 4.5% in Tuesday's after-hour trading session, reaching a high of $55.50. (See also: Did Microsoft Acquire LinkedIn for the Cloud Business?)

The world's largest software company parlayed the cloud performance by reporting quarterly results that beat analysts' expectations on both the top and bottom lines. In the three months that ended in June, Microsoft reported earnings per share of 69 cents, while revenue for the quarter grew 2% year-over-year to $22.64 billion. Wall Street's estimate was 58 cents per share on revenue of $22.15 billion, according to a Thomson Reuters.

“The Microsoft Cloud is seeing significant customer momentum and we’re well positioned to reach new opportunities in the year ahead,” said CEO Satya Nadella in a statement.

Revenue in Intelligent Cloud grew 7% to $6.7 billion, while server products and cloud services revenue grew 5%. This quarter marked the first quarterly report since the company spent $26.2 billion for LinkedIn Corporation (LNKD) last month. (See also: Microsoft LinkedIn Deal Spurs Moody's Downgrade Review.)

Microsoft now has an asset that analysts believe can help better leverage its cloud services, which it can sell/bundle to existing customers. This is seen as the major component towards narrowing the gap between itself and cloud leader Amazon. During the quarter, the company returned $6.4 billion to shareholders in the form of share repurchases and dividends.

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