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Buoyed by growth in its cloud computing unit, Microsoft (MSFT) - Get Free Report  on Thursday beat on its top and bottom line for the second quarter of 2017, causing several analysts to upgrade their price targets.

Shares of the software giant were up 1.7% to $65.40 on Friday morning. 

After the closing bell, Microsoft posted adjusted earnings 83 cents per share (a 9% increase year-over-year), surpassing analysts' expected 79 cents per share. Adjusted for Windows 10 revenue deferrals, revenue was $25.84 billion, higher than Wall Street's expected $25.3 billion. That figure excludes the impact of Microsoft's $26.2 billion acquisition of LinkedIn, which closed in the second quarter and represents its biggest deal ever. 

Sales were driven higher by Microsoft's outperforming Intelligent Cloud segment, a reflection of Microsoft CEO Satya Nadella's continued efforts to reposition the Redmond, Wash.-based company around the fast-growing cloud computing market.  

This was an "excellent quarter" that management really delivered on, TheStreet's Jim Cramer, co-manager of the Action Alerts PLUS portfolio, said on CNBC's "Mad Dash" segment on Friday. He called the top- and bottom-line earnings beat a "thing of beauty" and noted that margins are improving as well. 

Microsoft's cloud unit saw revenue of $6.9 billion, beating analysts' predictions for $6.72 billion. Microsoft doesn't provide specific figures for its Azure cloud offering, but the software saw its revenues increase 95% year-over-year. Cramer said that Microsoft has transformed itself behind the "cloud revolution," and asserted that the stock can continue to creep higher over the long-term, even for years.

Office 365 cloud applications, which are included in Microsoft's Productivity and Business Processes (PBP) segment, saw its revenue jump 49% year-over-year. 

Following the earnings report, Wall Street was bullish on shares of Microsoft, with several issuing price target increases. Here's what they had to say: 

Michael Turitis, Raymond James (Strong Buy, Price Target raised to $73 from $69)

"A combination of continued strong cloud growth and stability on-premise business suggest Microsoft's transition to cloud should remain on track. In cloud this quarter, Azure grew a strong 95% cc and commercial Office 365 was up 49%. In the on-prem business, server software accelerated to 9% cc growth from 4% last quarter, and Windows OEM grew ahead of PCs at +5%."

Philip Winslow, Wells Fargo (Outperform)

"As the headwinds from (1) a declining PC market in recent years and (2) the transition to the cloud abate relative to the increase in recurring subscription revenue from Azure and Office 365, we believe that Microsoft can return to double-digit EPS and FCF growth. Although many investors have already started to turn more positive on both Microsoft Azure and Office 365, we believe the multi-year impact of these two drivers, combined with the company's increased focus of operational efficiency, is not properly reflected in Microsoft's estimates or stock price."

Brad Reback, Stifel (Buy, PT raised to $69 from $66) 

"Overall, this quarter continues to reinforce our bullish thesis, namely that Microsoft 1) is well positioned around its Commercial Cloud (Office 365 and Azure) and that cloud profits and cash flow should inflect this year, 2) will continue strong expense discipline even while investing in higher growth and differentiated areas and 3) newer products will continue scaling leading to gross profit and operating income growth, and ultimately free cash flow growth, in coming years." 

Mark Moerdler, Bernstein (Outperform, PT raised to $76 from $72) 

"Margin improvement as the Cloud gained scale, coupled with operational improvements in the less profitable business segments in more personal computing have led to operating profit beginning to turn positive. This marks an inflection point in the company's transition to a mobile and cloud-centric company with high quality, recurring subscription revenues."

Richard Davis, Canaccord Genuity (Hold, PT raised to $65 from $60)

"Microsoft, put up a good quarter and management's opinion of the upcoming quarter was largely in line with our forecast. Beyond the headline financials, we were most intrigued by the firm's aggressive entry into collaboration with Teams and, while small, we had multiple positive data points on the AI firm, Maluuba - a firm that should quickly put Cortana on par with Amazon's Alexa and materially ahead of Siri, a system that seems to have atrophied."

Kevin Buttigieg, MKM Partners (Neutral, $60 PT) 

"Microsoft continues to realize cloud revenue growth and margin improvement toward a positive EPS tipping point in FY18 but in the meantime, upside is being driven by the less sustainable transactions-based businesses. Still investors appear, in our opinion, to be rewarding MSFT shares equally without perhaps understanding the necessary contribution from the transactions-based business in FY18 to ensure this projected EPS growth acceleration."

John DiFucci, Jefferies (Underperform, PT raised to $45 from $43) 

"Microsoft's modus operandi is in tact as it exceeded estimates established by its lowered guidance, only to report results that were about in line with previous consensus numbers. Also true to form, its guidance for next quarter was lower than consensus expectations adjusting for LinkedIn. Regardless, the results were stable with 1% revenue growth, though operating cash flow grew 12% with several asterisks."

Keith Bachman, BMO Capital Markets (Outperform, PT raised to $71 from $69) 

"Looking forward, we believe Microsoft will need to diversify its profit growth. PBP profit grew 1% y/y in CC, with LinkedIn costing 6 points of profit decline. IC profit declined 4% y/y in CC. Hence, virtually all of the profit growth was driven by MPC (+37% y/y in CC). To say it a different way, MPC revenues are declining, whereas PBP and IC revenues are increasing...We believe ongoing scale benefits in both IC and PBP will help, and note that commercial cloud GMs increased by 2 points y/y in the December quarter."

Ross MacMillan, RBC Capital Markets (Outperform, PT raised to $71 from $65) 

"While MorePC segment profitability remains the key driver, we the start of shift toward the growth segments becoming bigger contributors. Ex FX, P&BP EBIT grew for the second consecutive quarter and IC losses are diminishing fast. Over the next year, we think the drivers of earnings become more balanced, increasing conviction on sustainability."

Karl Keirstead, Deutsche Bank (Buy, $75 PT)

"The revenue star was the $20 billion server product business, which accelerated for the third consecutive quarter to 7% c/c growth due to the new product lineup and some buying ahead of FX-related price bumps. Coupled with solid VMW results, it feels like infrastructure software spend is better than feared. Cloud growth of 49% to $14 billion and Azure growth of 95% were very strong but in-line and a better PC market boosted revs from Windows/Office."

Brent Bracelin, Pacific Crest Securities (Overweight, $70 PT) 

"Cloud momentum at Microsoft (cloud revenue grew 49% y/y and now tops $14 billion annualized, or 13% of sales, up from 5% two years ago) reinforces our bullish view that it has successfully pivoted to become one of the largest and fastest growing enterprise-class cloud platforms. We recommend owning MSFT this year and see another 9% upside to $70."

Ryan Macdonald, Wunderlich Securities (Buy, PT raised to $75 from $70)

"While Azure and Office 365 continue to drive upside for MSFT, we believe the company's cloud grwoth trajectory remains in the early stages as the LinkedIn acquisition has now closed and contributed only approximately 3 weeks of revenue during the quarter. Looking ahead, we would define success for MSFT as an acceleration in productivity and business processes growth driven by improved traction for Dynamics 365 with the integrated LinkedIn functionality."

Rodney Nelson, Morningstar (Hold, $70 PT) 

"The core Microsoft business remains defined by its cloud products, but we continue to be pleasantly surprised by the resiliency of Windows business. We have maintained that the death of Windows has been greatly exaggerated, and the platform has undergone something of a renaissance behind Windows 10, with Surface Pro, Surface Book, Xbox and OEM devices driving strong adoption."