Microsoft shares rallied on Monday after a key upgrade from analysts at Raymond James. The stock continued to climb during morning trading today, rising by as much as 0.92% to $54.85 per share as the firm’s analysts explained that their bullish stance on the software giant is based on its opportunities in cloud services.

Raymond James’ upgrade follows another upgrade from Piper Jaffray earlier this month based on the success of Microsoft’s Xbox division and exclusive games.

Microsoft Corporation Climbs After Upgrade For Cloud Potential

Microsoft upgraded to Strong Buy

In a report dated Nov. 30, Raymond James analyst Michael Turits, Ph.D., set a price target of $62 per share for Microsoft with his upgrade to Strong Buy. He noted that just recently, it looked like Microsoft had missed the mobile movement, but now he sees solid opportunities in the next direction technology is moving in, which is the cloud. He thinks the company is “one of the only ‘hyperscale’ hybrid cloud vendors able to integrate Infrastructure-as-a-Service, Platform-as-a-Service, and Software-as-a-Service” through its onsite servers and software.

He said the company is “several years into” the cloud transition, noting that it is expected to make up about 17% of its total revenue in fiscal 2016. As a result, he’s predicting a 6% compound annual growth rate between fiscal 2016 and fiscal 2018 in total revenue.

Praise for Microsoft’s Azure

The Raymond James analyst and his team called Azure “one of the hyperscale elite,” echoing similar comments made by other firms. Azure is widely seen as a likely path away from the tumbling PC and software market and toward strong growth opportunities. He sees only Amazon Web Services and Google as being among the small group of cloud vendors that might be on the level with Azure and named Oracle for its expertise in Platform-as-a-Service.

Further, he praised Microsoft CEO Satya Nadella’s “aggressively open strategy” toward offering the company’s products on other platforms and believes this move will make Azure dominant in both Platform-as-a-Service and Infrastructure-as-a-Service.

Microsoft benefits from Office 365

Turits also sees opportunities in Microsoft’s subscription-based Office 365 and noted that the company’s suite of productivity software has remained steady despite Google’s free offerings in this area. In fact, he said Office 365 seems to be “accelerating several years into the transition to cloud” and that he likes the pricing and value of the cross-platform strategy, which he believes will maintain loyalty to Microsoft’s productivity software. He sees continued growth in the commercial value of Office as well.

And finally, on the topic of the risk to Windows and PCs, he thinks that as Microsoft’s cloud offerings become more valuable, they will more than offset the declines from the weakness in PCs, which has resulted in weakness in Windows monetization. He notes that Windows’ consumer business is expected to make up only 4% of total revenue in fiscal 2016, while the commercial side is expected to contribute 12% of total revenue the same year. He added that while Windows revenue is expected to decline 5%, non-Windows revenue, which includes the Surface tablets, Bing, and the Xbox, is expected to increase 6%.

He did trim his non-GAAP revenue estimate from $93.3 billion to $91.8 billion and his non-GAAP earnings from $2.74 to $2.62 per share for fiscal 2016, however, to account for currency headwinds and cloud ipacts.

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