Source: Microsoft.

Microsoft's (NASDAQ:MSFT) "lost decade" seems to be in the rearview mirror, and Microsoft shares have now risen to 10-year highs. The company has a lot going for it right now. Here are some reasons why it could continue its current trajectory.

1. Satya Nadella
Satya Nadella is just the third CEO in Microsoft's history, and investors seem to believe that he is the right man for the job. Just six months after becoming CEO, shares are up nearly 25% and easily outperforming both the S&P 500 and the Nasdaq Composite by a healthy margin.

Source: Microsoft.

It was time for change, and Steve Ballmer was a magnet for investor skepticism for various reasons. While Ballmer did help Microsoft grow tremendously during his 14 years as CEO, he could never escape the historical context in which he ascended to his position. He was named CEO at the height of the tech bubble, and the subsequent pop contributed to Microsoft's decade-long underperformance. For better or for worse, investors largely attribute Microsoft's "lost decade" to Ballmer.

As Microsoft continues into the "mobile-first, cloud-first" era, Nadella has demonstrated that he has a vision for the software giant. It's no coincidence that Microsoft's board picked the internal candidate previously leading its cloud business.

Under Nadella's leadership, Microsoft will be better positioned in the years ahead to capitalize on the ongoing secular trends toward mobility and cloud computing.

2. The cloud
Microsoft continues to make appreciable progress, shifting various parts of its business to the cloud. Office has long been more profitable than Windows, and the enterprise market for productivity software is quickly shifting toward subscription models.

Source: Microsoft.

Office 365 continues to gain traction, adding over 1 million subscribers last quarter. Microsoft now has 5.6 million users paying recurring subscriptions. The transition to a subscription model entails some risks for Microsoft's most profitable product, but Office 365 is making the switch admirably.

Commercial cloud revenue also continues to soar, thanks to Microsoft's Azure cloud computing business. The company has grown its data center footprint in several important countries, including Brazil and China among others.

While it's entirely true that infrastructure-as-a-service is a largely commoditized business, with Microsoft, Google, and Amazon all currently embroiled in a price war, Azure is an important platform that Microsoft can build more profitable services on top of, such as its enterprise mobility suite. Office 365 and Azure are driving the growth in commercial cloud revenue, which is currently at a $4.4 billion run rate and shows no signs of slowing down.

3. Windows 9
Let's face it: Windows 8 was a flop. Microsoft's bold attempt to reinvent the primary computing method that's been in place for 30 years has been one of the company's most controversial moves. Users simply weren't ready to rely entirely on the new tile-based interface while abandoning the familiar Start Menu.

In response to user backlash, Microsoft has been slowly backing away from the dramatic interface changes, starting with Windows 8.1. When Microsoft released Windows 8.1 last year, it brought back the Start button, albeit in a neutered form. Windows 9 will backtrack even further to the way things used to be, introducing windowed Metro apps, removing the Charms bar, and bringing back a full-fledged Start Menu.

Microsoft has been enjoying enterprise upgrade activity in the wake of Windows XP's end of support, but that hasn't really translated well on the consumer side. If Microsoft can make amends with users with Windows 9, which is expected to be released in 2015, it could potentially trigger a meaningful consumer upgrade cycle.