Investors have been watching Amazon (NASDAQ: AMZN) and Apple (NASDAQ: AAPL) in the race to $1 trillion in market capitalization, but Morgan Stanley is betting on Microsoft (NASDAQ: MSFT) to reach that milestone in the next 12 months thanks to cloud adoption.
The investment bank raised its one-year price target from $110 to $130, 49 percent higher than where the stock closed on Friday. At $130, Microsoft would be worth $1 trillion. Its current market value is $671 billion, behind Apple at $856 billion, Amazon at $747 billion and Alphabet at $730 billion.
Cloud computing uses remote servers hosted to store and process data instead of a personal computer or local server. Microsoft looks poised to keep a dominant share of the public cloud market, which Morgan Stanley expects to more than double in size to more than $250 billion.
Morgan Stanley also said the combination of Microsoft's cloud assets with existing assets, including a large customer base and distribution channel, should help the company gain market share over the next three years.
The bank highlighted Microsoft analytics, machine learning, productivity apps, front office apps and core financials as ways that Microsoft stands out from cloud giants Amazon and Google.
In other news this week involving what investors call "Mr. Softee", the company and Adobe (NASDAQ:ADBE) announced a step forward in their global partnership announced in September 2016. The companies are extending their partnership into China to help global brands locally deliver personalized experiences across customer touchpoints in this important and growing market.
MSFT stock advanced $1.18, or 1.3%, early Tuesday to $94.96.
