Microsoft’s transition into cloud-based technology opens up new, lucrative markets for the software giant, according to Atlantic Equities, which assumed coverage Monday at overweight.

The company’s recent organizational changes to better capitalize on its cloud computing business – known as Azure – is set to be a key profit driver, analyst James Cordwell told clients in a note. The firm’s previous rating under another analyst was neutral.

“Azure has replaced Windows as the platform underpinning Microsoft’s enterprise offering, and we forecast it exceeding $100 billion revenue over the next decade,” Cordwell wrote. “With Office 365, Microsoft has already established a strong position in the software as a service market and there remains robust growth potential as the greater accessibility of the cloud delivery model continues to drive expansion in the user base and customers steadily upgrade from basic packages.”

Cordwell’s Microsoft price target of $125 represents 24 percent upside from Friday’s close.

Competition in the cloud computing space is on the rise as Microsoft’s Azure and Amazon Web Services vie for dominance in the enterprising software business.

The former, however, appears to be quickly establishing a foothold in the space and eating into Amazon’s stronghold, with the company’s share of the market jumping to 13 percent from 10 percent approximately one year ago, according to findings from Synergy Research Group and Canalys.

“While Azure is not going to establish the monopoly position that Windows enjoyed, we believe it is addressing a much larger market that is still in the early stages of development,” Cordwell added. “We model Amazon Web Services and Azure reaching $185 billion and $115 billion revenue in 10 years’ time, implying roughly 70 percent combined share of the market at that time.”

The analyst forecasts that the Redmond, Washington-based company will report fourth-quarter earnings per share of $1.09 and full-year EPS of $3.87, just above consensus estimates provided by FactSet.

In its latest report, Microsoft posted earnings and revenue results in April that easily topped Wall Street estimates, raising its sales expectations for later in the year.

At the time, chief financial officer Amy Hood remarked about the company’s upcoming 2019 fiscal year. “Revenue growth will continue to be driven by the transition to cloud services,” she said.

Overall, Microsoft’s revenue grew 16 percent year over year in the quarter, which was the third quarter of the company’s 2018 fiscal year, according to its earnings statement.

Microsoft shares ticked lower in premarket trading Monday; the stock is up more than 17 percent since January and up 41 percent over the past 12 months.