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Microsoft, which built its business on PC software like Windows and Office, has reached a tipping point in the cloud.

For the first time, Microsoft’s cloud services generated as much revenue as all its other businesses combined, including mainstays like traditional software licensing and hardware, according to a new analysis from research firm CFRA.

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“We estimate that FY 4Q 19 was the first time MSFT generated as much revenue from running software in its own data centers, including cloud offerings like Azure and Office 365, as well as LinkedIn, Bing, GitHub and Xbox-Live, as it did from software licenses and upgrades, hardware and professional services,” according to the note from CFRA’s John Freeman.

The analysis dovetails with the news last week that the company’s Intelligent Cloud division was the leading revenue generator among the tech giant’s other major divisions for the first time under its current financial reporting structure. However, that division also includes some traditional software, such as Windows Server and SQL Server, so the CFRA analysis makes the milestone more clear.

Microsoft Azure s the clear number two player in the competitive cloud market behind incumbent leader Amazon Web Services. It is going head to head against its cross-town rival for a huge cloud contract with the U.S. Department of Defense that could tighten up the race between the two companies if it swings Microsoft’s way.

Microsoft’s stock surged in the days following the earnings report, hitting an all-time high of $139.20 on Tuesday. Microsoft’s financial success has earned it the title of the most-valuable U.S. company with a market cap of $1.06 trillion.

Analysts at CFRA bullish on the company looking forward. As cloud continues to surge and make up the majority of its business Freeman, expects profits to rise. As a result, he has set a target for Microsoft’s stock at $177, which represents a 28 percent boost to its current stock price.

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