What happened

Microsoft (NASDAQ:MSFT) outpaced the market last month as the stock gained 11% compared to a 4% jump in the S&P 500, according to data provided by S&P Global Market Intelligence.

The increase produced new highs for shareholders as the software titan crossed $1 trillion in market valuation for the first time.

A man smiling while working behind a laptop.

Image source: Getty Images.

So what

In a late-April earnings report, Microsoft demonstrated why Wall Street believes it is one of the most valuable companies on the planet. Surging cloud revenue allowed sales to rise 14% to $30.6 billion in the first quarter. Operating income rose at a much faster pace, jumping 25% to over $10 billion. Microsoft enjoyed broad-based gains, with demand rising in its PC-based products, its gaming unit, and its cloud services.

Now what

CEO Satya Nadella and his team forecast another strong quarter ahead, with growth occurring across key product segments like PC and tablet operating systems and commercial cloud services. The arguably better news for investors is that a growing proportion of these sales is comprised of recurring revenue subscriptions. That fact implies increased stability and clarity around business results over the next few quarters.