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Metamorphosis isn’t supposed to look this easy. Microsoft has been shifting its decades-old products to the cloud without having to make a single insurance claim for business interruption. Indeed, revenue rose 13% in the quarter ended June 2017, while earnings doubled.

As customers increasingly choose to carry on their computing and data storage in the cloud—that is, in shared data centers operated by the likes of Amazon.com (ticker: AMZN), Alphabet (GOOGL), and Microsoft (MSFT)—instead of on the customers’ own premises, Microsoft could have been left in the dust. Instead, its cloud business doubled in the June quarter and is on track to surpass that of the category pioneer Amazon, while Microsoft shares are up 70% in the last couple of years, to a recent $72.50. Microsoft’s feat is like an airline upgrading a Boeing 747 to a 787 in mid-flight, without discomfiting the passengers.

Microsoft shares hover near their all-time high, which values them at 22 times the $3.31 that the Redmond, Wash.–based software giant earned in the fiscal year ended June 2017. With its above-market multiple and better-than-expected growth, has Microsoft stock hit a cloud ceiling?

I DOUBT IT. The world’s journey to the clouds has only just begun, and Microsoft has shown it can transform itself without injuring its profit margins. Customers and investors seem willing to go along. Meanwhile, the company has a vibrant computer-game franchise and may make something good of its December 2016 acquisition of the LinkedIn professional social network. On the current flight path, Microsoft shares could see 80 or 90 bucks in twelve months’ time.

Loads of credit must go to Chief Executive Satya Nadella, who came to the job three years ago after running Microsoft’s cloud and enterprise group, where he shook off the company’s annoying tradition of locking customers into Windows operating systems. He’s famously used an Apple laptop in public appearances. New versions of products like Microsoft SQL Server database-management software run not only on Windows, but also on the open-source Linux operating system, as well as on Docker, another open-source software platform that makes it easier to deploy an application in new places. Microsoft has also put its heft behind the open-source data-analysis project known as R, used worldwide by scientists and engineers.

The company has the advantage of prospecting for cloud customers in its entrenched base of large enterprises that already have Microsoft products installed on their premises. Microsoft is turning that installed base of noncloud products from ballast to a buoy, by designing its Azure cloud system as a hybrid public/private computing world that knits customer premise installations into the edge of the company’s cloud ecosystem. Azure customers will be able to spread their data and computing workloads among their own data centers or those of Microsoft, with greater ease than customers of Amazon or Google Cloud. To serve its far-flung customers, Microsoft already has more data centers around the world to support its public cloud than do those other guys.

The horizon is far off for the cloud opportunity. When Credit Suisse analyst Michael Nemeroff launched coverage of Microsoft last April, with an Outperform rating and an $80 price target, he estimated that large enterprises have moved fewer than 10% of their computing workloads to the cloud. The conversion process could last decades, he said.

MICROSOFT’S CLOUD PASSAGE would be harder without the cash that pours in from the company’s Windows operating system, which the Credit Suisse analyst thinks is the source of over a third of Microsoft operating profits, at profit margins double those of the overall company. That bounty is threatened, of course, by the declining share of our digital lives spent in front of personal computers. One impressive aspect of the June quarter was that Windows licensing revenue from PC makers actually rose in the quarter. But a faster-than-expected decline in the PC market would make Microsoft’s cloud transformation more painful.

Another hedge for the company’s cloud bet is the Xbox game business, which accounts for nearly 10% of Microsoft revenue. That is becoming more of a cloud business, too, with over 50 million users online with Xbox Live. The newly acquired Mixer service lets gamers stream their play to a viewing audience, launching Microsoft into the fast-growing world of eSports, along with Amazon’s Twitch and Google’s YouTube. Growth in Microsoft’s gaming services, and strong sales of company-owned titles like Halo and MineCraft, enabled the company’s gaming revenue to grow 3% in the June quarter, despite weak sales of the Xbox console. That weakness will be remedied soon, when the Xbox One X arrives in November. The new console will have 50% more processing power than Sony’s PlayStation4 Pro, an aging platform that won’t be updated by Sony (SNE) until about a year after the new Xbox.

Microsoft shares actually sold off when the company reported its impressive June results, as company financial chief Amy Hood cautioned that investment in cloud products will entail meaningful spending during the current fiscal year ending June 2018. Even if the stock takes a breather, investors will get paid for holding on, as the company continues its practice of returning capital to shareholders. In fiscal 2017, it bought back $1.6 billion worth of stock and paid $3 billion in dividends at a rate that amounts to a 2% yield.

This cloud stock’s still worth a flyer.

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