Thanks to its cloud computing business, Microsoft Corp. (MSFT) is on track to become a $1 trillion company by 2020.

That’s according to Evercore ISI, which made the prediction amid a surge in the software giant's share price in 2017 as investors reward the Redmond, Wash., company for its booming cloud business. In a research report late last week, Evercore analyst Kirk Materne said strong growth in the Azure cloud business and Office 365 should get Microsoft to the $1 trillion mark.

Earlier this year it surpassed $600 billion in market capitalization for the first time since the dotcom boom thanks to its cloud business. Its market cap currently stands at $657.5 billion, after closing Monday’s trading session at $85.23, up $1.07 or 1.27%. So far for the year shares are up 37%. (See also: Microsoft Worth $600B—1st Time Since Dot-com Boom.)

No 'Death Star'

The way Materne sees it, Microsoft's cloud business has an advantage over rival Inc. (AMZN) and its Amazon Web Services (AWS): a business that isn’t becoming a competitive threat to its cloud customers. "The Amazon 'death star' phenomenon is a growing point of discussion in the enterprise market," Materne wrote in the research report covered by CNN Money. "Amazon's ambitions in certain industries are now having a real impact on how certain enterprises think about AWS as a potential vendor." As Amazon pushes into new markets be it grocery stores with its acquisition of Whole Foods or into media with its streaming video service, customers are growing concerned about housing their data with a rival. That has opened the door for Microsoft to steal share. For its fiscal first quarter, which it reported in October, the software company said it surpassed its goal of $20 billion in annualized revenue run rate for its cloud business. Azure revenue jumped 90% compared to a year ago while Office 365 subscriptions increased 42% from last year’s fiscal first quarter. (See also: Microsoft to Triple Cloud Capacity in China.)

Materne warned that AWS could face further pressure as Microsoft and other rivals continue to go after its customers. "As Amazon's global ambitions expand into other segments of the economy, AWS's competitors will continue to remind potential customers that by going with AWS, they are essentially helping to fund their competitor," Materne said in the note.

Microsoft isn’t going to be alone at the $1 trillion party, with Apple Inc. (AAPL) expected to beat it to that milestone next year, becoming the first $1 trillion company thanks to the launch of the iPhone X. The latest iPhone has a starting price tag of $999 that should boost gross margins and profits for the Cupertino, Calif., smartphone maker. Currently, Apple’s market cap stands at $886.5 billion. In early November it crossed the $900 billion threshold.  Shares are up 47% on the year in 2017.


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