Shares of Microsoft (NASDAQ: MSFT) are trading 2.7% higher in pre-open trading Wednesday after the tech giant delivered a better-than-expected performance for the fiscal second quarter ended December 31, 2020.

Microsoft reported earnings per share (EPS) of $2.03 vs $1.64 expected from the market analysts. Revenue for the quarter came in at $43.08 billion to easily beat $40.18 billion expected from the Street.

“What we have witnessed over the past year is the dawn of a second wave of digital transformation sweeping every company and every industry. Building their own digital capability is the new currency driving every organization’s resilience and growth. Microsoft is powering this shift with the world’s largest and most comprehensive cloud platform,” said Satya Nadella, chief executive officer of Microsoft.

As for the future, MSFT expects its revenue to come between $40.35 billion to $41.25 billion in fiscal third-quarter revenue, with the middle point of the range higher than the $38.70 billion consensus among analysts.

“Accelerating demand for our differentiated offerings drove commercial cloud revenue to $16.7 billion, up 34% year over year,” said Amy Hood, executive vice president and chief financial officer of Microsoft. “We continue to benefit from our investments in strategic, high-growth areas.”

The cloud business excelled with a revenue of $14.60 billion. It represents a growth of 23% year-over-year and better than $13.77 billion expected from analysts.

Following last night’s results, Wedbush analyst Daniel Ives raised the price target on MSFT to $285.00 from the prior $270.00. The analyst described quarterly results as “Picaso-like performance for the ages”.

“In a nutshell, these were blow out numbers that will be another feather in the cap for the tech sector as the cloud growth party is just getting started in our opinion led by MSFT,” Ives wrote in a note sent to clients.

“We believe the strong numbers from Nadella & Co. is a broader indication of strength we expect to see across the enterprise cloud software landscape throughout this earnings season,” he added.

Similarly, Mizuho’s Gregg Moskowitz raised the PT to $270.00 from the old $255.00 to reflect his confidence in MSFT’s positioning.

“MSFT reported a particularly strong F2Q, and with a level of upside that was even greater than our bullish expectations. All three business segments delivered meaningful outperformance. In addition, Azure revenue growth (+48% Y/Y CC) was impressive, representing no deceleration despite the law of larger numbers and a modestly tougher compare. F3Q guidance was also significantly above the Street. Looking forward, we remain confident that MSFT is positioning for even greater success in cloud over the medium-term and beyond,” Moskowitz said in a research note.