Microsoft Shares Hit All-Time High

Shares of Microsoft Corp. jumped to an all-time high Friday in the wake of a positive earnings report, nearly 17 years after setting its previous high-water mark in the heyday of the dot-com boom.

The stock traded at $60.30 just after the stock market opened, up 5.3% and eclipsing its previous midday trading high of $59.97.

In December of 1999, Microsoft shares closed at their highest level, $59.56, adjusted for a 2003 stock split. Back then, the stock soared on the software giant's dominance of the PC operating system market and productivity applications. The company was riding the wave of internet use, which boosted demand for its software.

But as the dot-com bubble burst, Microsoft shares slid and then stagnated for nearly 13 years as the company wrestled with antitrust regulators and lagged rivals such as Apple Inc. and Alphabet Inc. on emerging tech trends such as mobile computing and web search.

Investors often blamed then-Chief Executive Steve Ballmer for the company's challenges. The stock started to rally in the summer of 2013, about the time that Mr. Ballmer announced he would leave Microsoft.

His successor, Satya Nadella, has unwound some of Mr. Ballmer's failed efforts, notably writing off most of the $9.4 billion acquisition of Nokia Corp.'s handset business. Instead, Mr. Nadella has focused the company's efforts on cloud computing, tapping longstanding relationships with corporate customers to convince them to use Microsoft's web-based, on-demand Azure services.

While Amazon.com Inc. dominates the market, Microsoft has emerged as the online retailer's stiffest competition. For the last year, revenue from Azure has doubled compared to the year-earlier period each quarter.

Mr. Nadella, on the company's earnings conference call Thursday, highlighted the progress of the company's cloud business.

"Once enterprise customers choose one of our cloud services, they continue to adopt more services," he said. He noted that Microsoft's cloud business has annualized revenue of more than $13 billion and that the company remains on track to expand that to $20 billion in fiscal 2018.

Microsoft shares began their latest rally three months ago, after the company posted better-than-expected fiscal fourth quarter results on the strength of its cloud business. The stock popped again in after-hours trading Thursday after first quarter results showed Microsoft continuing to successfully transition its business to the cloud.

Write to Jay Greene at Jay.Greene@wsj.com