Microsoft (MSFT) - Get Report  was awarded on Friday a highly-coveted, $10-billion contract to provide cloud computing services to the U.S. Department of Defense, but one analyst is already saying the contract is potentially worth far more than that already large amount. 

The stock was rising 2.2% to $143.80 a share on Monday afternoon. Shares are up more than 41% year to date.

On Friday after the market close, the Department of Defense surprisingly announced it is awarding its JEDI (Joint Enterprise Defense Infrastructure) cloud contract to Microsoft rather than Amazon (AMZN) - Get Report , Microsoft's arch rival in the fast-growing cloud computing business. The "general purpose cloud contract award," as the DoD puts it, "is meant to "address critical and urgent unmet warfighter requirements for modern cloud infrastructure," the agency said. 

Dan Ives, an analyst at Wedbush Securities, noted "this is a game changer deal for Microsoft to win as [JEDI] will have a ripple effect for the company's cloud business for years to come and speaks to a new chapter of Redmond winning in the cloud vs. Amazon," in a note. 

The contract itself is worth $10 billion over the 10-year life of the agreement. But Ives said the deal could be worth much more, as Microsoft would be able to leverage the agreement to generate more revenue in the future. This "paradigm changer for Microsoft," Ives said, could add $10 to Microsoft's current share price. 

Microsoft closed at $140 a share on Friday, so a $150 price would reflect 7% upside from that level. 

"When you consider the significant attention that Azure has gained from CIOs in recent months (the bulk of future investments are expected to flow toward Azure), [MSFT's victory] starts to make more sense, especially given that Microsoft has thus far been able to navigate the regulatory environment," said Zev Fima, portfolio analyst for Jim Cramer's Action Alerts Plus Portfolio.

To Ives, the upside to the deal is Microsoft's ability to win more government contracts. He says the total market for government cloud spending is roughly $100 billion over the next 5 to 7 years. "This is a massive shot of credibility for them to get other deals from the government," Ives told TheStreet.

Amazon and Microsoft have dominated cloud computing, with Amazon a strong number one. But Amazon's earnings report last Thursday showed an Amazon Web Services revenue miss of expectations ($9.1 billion v. $9 billion), while Microsoft's 59% Azure revenue growth beat expectations. Tom Forte, D.A. Davidson & Co. analyst told TheStreet that "competitive pressure from Microsoft needs to be monitored." 

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