In a new report to investors late on Monday, the firm put a 12-month price target of $130 (roughly Rs. 8,460) on Microsoft's stock, up from $94 per share.
According to technology website Geekwire, shares of Microsoft rose more than seven percent on Monday.
Microsoft is currently valued at $722 billion, Apple is valued at $876 billion, Amazon at $753 billion and Alphabet at $731 billion.
Analysts said that "strong positioning for ramping public Cloud adoption, large distribution channels and installed customer base and improving margins" would help Microsoft make a company reach $1 trillion in market value.
They also noted that Microsoft "is well positioned to benefit from strong cloud spend".
"A Public Cloud solution spanning from core infrastructure services (compute, storage), to compelling Platform-as-a-Service (PaaS) capabilities (data, identity, analytics, machine learning) and up the stack to the application layer (productivity apps, front office apps, core financials) differentiates the Microsoft Public Cloud offering from Cloud giants Amazon and Google," the analysts said in the report.
"However, it is the combination of these Public Cloud assets with pre-existing enterprise assets, including a large existing customer base, expansive direct and indirect distribution channel, over 6+ million '.Net' developers and a suite of strong on-premise technology that likely drives continuing share gains over the next three years," the report added.