Microsoft (MSFT) - Get Report seems to have gotten its groove back for good. 

For several years now, under the guidance of CEO Satya Nadella, the company has been undergoing a rapid transformation from Silicon Valley laggard to an emerging cloud leader. Its fiscal fourth-quarter results, reported on Thursday, reaffirmed that the transition is in full swing and starting to lift many of its core businesses. Microsoft beat on both its top and bottom line, while Azure revenue increased 97% year-over-year.

Microsoft shares hit a new all-time high right after issuing its report, but shares started to fall back during the earnings call as the company gave a slightly disappointing fiscal first-quarter revenue forecast and on Friday afternoon, the stock was down 0.7% to $73.68. On the earnings call with investors, Microsoft said it expects first-quarter revenue to be between $23.6 billion to $24.3 billion, which is light compared to analysts' estimated $24.2 billion. 

Not long ago, the tech giant faced an uncertain future. Everything at Microsoft revolved around its Windows operating system and it was in desperate need of change. It had made a costly acquisition to navigate the burgeoning smartphone revolution, which ultimately failed, and ended with the company vastly downsizing its mobile business. 

Former Microsoft CEO Steve Ballmer kickstarted Microsoft's transformation in 2013 when he announced a company-wide restructuring. In the wake of that, Microsoft's legacy Windows and Office products have now begun to take a back seat to newer businesses, such as its Commercial Cloud segment, which includes Azure, Office 365, its Dynamics 365 customer relationship management software and other cloud initiatives. 

During the fourth quarter, all units in Microsoft's cloud business posted double-digit year-over-year revenue growth, with Azure up 97%, Office 365 higher by 43% and Dynamics 365 up 74%. 

"These are very positive signs of just how much progress the company is making in newer product segments," said Patrick Moorhead, president of market research firm Moor Insights & Strategy.

Several analysts have pointed to the fact that Azure is preferred among more and more big enterprises, showing that it's gaining ground in the race against Amazon's (AMZN) - Get Report  dominant AWS cloud offering. 

At the same time that Microsoft is gaining ground in the enterprise market, it's also doing well at the consumer level, said Greg Portell, lead partner at strategy and management firm A.T. Kearney. Sales of Microsoft's Surface laptops decreased slightly during the quarter, but the company has tried to get an edge on college-aged consumers with the newest Surface Laptop, released in May. Microsoft also released the Surface Pro earlier this year, which is billed as being "the tablet that can replace your laptop." Moorhead said he expects an uptick in Surface sales next quarter as both laptops become fully available worldwide.

Other consumer-facing businesses, such as Microsoft's gaming unit, also did well during the quarter. Gaming revenue ticked up 3% year-over-year as more people continue to buy gaming software and services on its flagship Xbox consoles.

"Microsoft has provided a strong example of how bold decision making and clarity of purpose should be at the forefront of corporate turnarounds," Portell said. "The leadership team has been able to simplify a large business in a way that increased profitability and overall competitiveness." 

But at the end of the day, it's Microsoft's cloud business that's stealing the show. Two years ago, Nadella stated an ambitious goal of the company's cloud business generating $20 billion in annual cloud revenue by 2018. Microsoft is pretty close to getting there, given that its Commercial Cloud business is now up to an $18.9 billion annual run rate. On the company's earnings call, Nadella noted that Azure is "resonating" with bigger and bigger customers to its Azure cloud platform, including T-Mobile (TMUS) - Get Report , Sephora and Walgreens, among others. Baidu (BIDU) - Get Reportsaid earlier this week that it would use Azure to help build its autonomous driving project. 

"Microsoft is one of the few companies to turn the corner from classic enterprise to cloud native," Moorhead said. "Their recent wins with marquee customers...in cloud-native areas like Azure, IoT, mobility, CRM and team collaboration are telling."

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