There's plenty of enthusiasm about Microsoft these days, but not everyone is feeling the love.

Shares of Microsoft (MSFT - Get Report) are up 36% so far this year, and many analysts forecast more growth to come on the basis of growth in gaming, Azure and other areas. The company's recent gains have made it the only public company in the world to be worth more than $1 trillion currently, ahead of Amazon (AMZN - Get Report) and Apple (AAPL - Get Report) . On Tuesday, however, Jeffries analyst John DiFucci struck a contrarian tone on Microsoft's prospects.

In a note, he argued that Microsoft shares are "materially overvalued" and overlook some substantial risks. Microsoft shares were down 2.66% to $134.12 on Tuesday, compared to a decline of 0.96% for the Nasdaq. DiFucci rates Microsoft shares underperform although he raised his price target from $80 to $90. 

"We understand the overwhelming majority of investors have a very positive bias toward MSFT, but we do not believe the current price reflects the material risks associated with a major profit center of the company (i.e., Windows), or the long-term potential margin of everyone's darling (i.e., Azure)," he wrote. 

Although Azure has been gradually closing the gap with AWS in terms of market share, DiFucci made the case that Azure's margins may never quite match those of Amazon's (AMZN - Get Report) AWS. 

"At the same scale that AWS had operating margins in the mid 20s%, Azure operating margins were negative -- and still probably are," he wrote. "We believe this is due to cultural differences between the two companies and technological differences between the two platforms, in addition to pricing pressure, all of which are likely to persist."

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