Microsoft could reach a $1 trillion market cap by 2020 or sooner, analysts from Evercore ISI said in a Thursday note. The company's current market cap is around $650 billion.

In coming up with their calculations, the analysts — who also raised their target price from $93 to $106 — pointed to the growth of Microsoft's Office business, partly thanks to pushes into the world of front-line workers and the education market.

The analysts also cited the new Microsoft 365 offering, which bundles several services along with Office 365 applications, as a key growth driver, as it could convince businesses to subscribe to services they normally would skip.

The analysts expect Microsoft's Office 365 commercial business to generate $26.86 billion in revenue in the company's 2021 fiscal year, which will go through the second half of 2020 and continue through the middle of 2021.

"While we believe best in breed offerings such as Okta for IAM, Tableau/Qlik for BI/Analytics, Box/Dropbox for collaboration, or VMware AirWatch for EMM will maintain their respective leadership positions, on the margin, we expect Microsoft 365 to win incremental share over time due to its ease of integration with the broader Office productivity platform and enterprise customers' proclivity to buy a 'suite' of products vs. best of breed solutions, especially in the SMB market where IT resources are scarce," Evercore analysts Kirk Materne, Fenn Hoffman, Tom Mao and Daniel Greenfield wrote.

The analysts predicted that the Office 365 consumer business will produce $5.18 billion in revenue in Microsoft's 2021 fiscal year.

At the same time, Microsoft's Azure public cloud business — which is second only to Amazon Web Services — continues to grow, and the Evercore analysts said that in the company's 2021 fiscal year it could register $22.19 billion in revenue. The analysts pointed to the Azure Stack private cloud software, which is meant to mirror what's available on the Azure cloud, as a point of differentiation.

"As Azure's revenue scales across a more fixed base of infrastructure investments, we believe Azure has the potential to drive meaningful operating leverage and FCF over the next 4 years and should ultimately reach 30%+ op. margins (vs. AWS at 25% today), to become one of Microsoft's core earnings and FCF drivers over the next decade," the analysts wrote.

They noted that declines in devices and on-premises versions of the Dynamics and Office software should be partly offset by growth from LinkedIn and gaming.