Microsoft Corp.’s cloud computing revenues shot up 116 percent, providing a big boost to fiscal first quarter earnings, the company reported today.

Shares of Microsoft rose nearly 6 percent to reach an all-time high of about $60.60 in after-hours trading on the results, surpassing a record high of $59.56 set back in 1999.

The software and cloud giant earned 76 cents a share, before certain costs such as stock compensation, on $22.3 billion in revenues for the quarter ended Sept. 30. That’s significantly higher than the 68 cents a share on $21.71 billion in revenues that analysts on average had forecast, though net income fell 4 percent, to $4.69 billion from a year ago.

“We are not trying to fight old battles,” Microsoft Chief Executive Satya Nadella (above) said on the company’s earnings call. Instead, he added, Microsoft is investing in new growth areas such as cloud, mobile and artificial intelligence. “We are helping people be more productive by bringing intelligence to familiar office apps they use every day,” he added.

Microsoft’s Azure cloud services were a particular bright spot, as compute usage doubled from a year ago. The company reported a $13 billion run rate for its commercial cloud portfolio, which also covers services such as the commercial levels of Office 365 and its Dynamics CRM Online services. “Once enterprise customers choose one of our cloud services, they continue to adopt more services,” Nadella said.

What’s more, even though Azure trails far behind Amazon Web Services in market share, cloud computing is becoming more profitable for the company. In its commercial cloud, it earned gross margins of 49 percent in the first quarter, up from 42 percent three months ago. The company said on its analyst call that that margins will vary depending on the shift of various services to Azure but should continue.

“While many tech vendors are seeing P&L stress as they begin their journeys to a cloud computing and subscription model, this print may mark the quarter that MSFT puts much of that stress behind it and starts a margin/EPS ramp,” Deutsche Bank analyst Karl Keirstead said in a note to clients.

Microsoft said part of the growth in cloud was driven by Office 365. “Azure growth was superb, Office 365 growth was very large and there was positive growth for on-premises server software,” said Patrick Moorhead, principal at Moor Insights & Strategy. “Office 365 Commercial has 85 million monthly active users and 24 million consumer subscribers, a huge number reflecting the company’s race to the cloud.” 

Sales of the company’s Surface line of tablets and laptops grossed $926 million in the past quarter, up from $672 million a year ago.

Other areas of Microsoft, however, saw declines. The unit that sells Windows software as well as the mobile business fell 1.8 percent. Phone revenues fared far worse, falling 72 percent.

“At some point, that Windows number needs to start to rise, but given PC market declines, it’s hard to expect that any time soon,” Moorhead said. “But I am seeing positive signs in the commercial PC market for 2017. Enterprises are realizing they need to buy new hardware to take full advantage of the security features in Windows 10.”