KeyBanc analysts said Microsoft Corp (MSFT) - Get Report will dethrone Amazon.com (AMZN) - Get Report Web Services to become the "king of the cloud" this quarter.

Analysts reiterated an "overweight" rating and increased their price target for the software giant to $82 from $78. The new target implies a 10% upside from Thursday's closing stock price.

Microsoft's commercial cloud revenue increased 56% year over year, which exceeded KeyBanc's estimates by about $2 billion. "The sheer size and accelerating pace of cloud growth increases our confidence in the bull-case scenario that Microsoft Cloud can quickly scale north of a $50 billion segment by 2021."

KeyBanc lowered GAAP earnings per share estimates, writing that outsized growth in cloud investments "more than justifies" a higher stock-based compensation that will put pressure on margins.

Microsoft stock was slightly up in premarket trading.

More of What's Trending on TheStreet: