Microsoft reported fiscal third-quarter results on Wednesday, and the stock jumped more than 3% on better-than-expected earnings and revenue.

Here are the key numbers:

  • Earnings: $1.14 per share, excluding certain items, vs. $1.00 as expected by analysts, according to Refinitiv.
  • Revenue: $30.6 billion vs. $29.84 billion as expected by analysts, according to Refinitiv.

Microsoft shares are trading near a record after rallying 34% over the past year. The stock climbed past $129 in extended trading and is a little over $1 away from lifting the company to a market value of $1 trillion.

Sales jumped 14% in the latest quarter, driven by the company’s transition to the public cloud as more large businesses offload their servers and data storage to Azure infrastructure. Gross margin, or the percentage of revenue left after accounting for the costs of goods sold, was 66.7% up from 65.4% a year earlier.

Azure’s revenue surged 73%. Microsoft’s commercial cloud business, which includes Azure, grew 41% in the quarter to $9.6 billion. While Azure is still much smaller than rival Amazon Web Service, Stifel analysts say it’s growing faster than AWS was at a similar size.

“We continue to believe the shift to the cloud will be additive to Microsoft given a broader portfolio of products with deeper functionality as well as Microsoft’s ability to enter new categories where it did not compete previously,” wrote Stifel’s Brad Reback, who has a “buy” rating on the stock.

Microsoft and AWS are in the last stages of competing for a $10 billion Department of Defense contract, known as JEDI, after IBM and Oracle were recently ruled out. Last week, Wedbush analysts said momentum has been moving towards Microsoft CEO Satya Nadella in his effort to catch Amazon’s Jeff Bezos.

“The tide has turned significantly for MSFT on the ‘game changing’ $10 billion JEDI Beltway cloud deal for the Pentagon with our work in the field indicating this bake-off is now a toss-up and even odds between Bezos and Nadella vs. the slam dunk win for AWS that it appeared to be roughly a year ago,” wrote Daniel Ives, an analyst at Wedbush, who recommends buying Microsoft shares. It “could represent a key positive catalyst for MSFT looking ahead when this winner likely gets announced in the summer time-frame,” he wrote.

Microsoft is also benefiting from the move to cloud applications, pushing users of its traditional productivity products like Word and Excel to the cloud-based Office 365 suite. Commercial sales of Office 365 increased 30%. And LinkedIn, the professional-networking site that Microsoft acquired for over $26 billion in 2016, continues to grow much faster than the overall business. LinkedIn’s revenue climbed 27% in the quarter.

Microsoft is likely to provide guidance for the fiscal fourth quarter on its earnings call Wednesday afternoon. Analysts expect revenue growth of 8.4% to $32.6 billion and per share earnings of 1.18, according to Refinitiv.

The company kicked off tech earnings season, with the mega-cap companies all slated to report in the next week. Facebook’s results are also coming after the bell on Wednesday, followed by Amazon on Thursday, and Alphabet and Apple early next week. Expectations are high, after the Nasdaq climbed to an intraday record on Wednesday.

Executives will discuss the results with analysts on a conference call at 5:30 p.m. Eastern time.

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