MORGAN STANLEY: Microsoft shares could jump 46% in the next year (MSFT)

Microsoft shares could be set for a huge bump, according to Keith Weiss, an analyst at Morgan Stanley.

In a note to customers Monday, Weiss noted the company's increased profits and greater success in cloud services as potential drivers of strong growth. Weiss raised its target price for Microsoft from $ 72.00 to $ 80.00, but said it could go as high as $ 102, a 46% increase in its current price.

Weiss outlined three main reasons why he thinks Microsoft's share price could rise sharply this year: cloud services, consumer-oriented technologies, and company finance.

Microsoft is expanding its market share in cloud services, which could boost profits, according to Weiss. More companies are embracing Azure, Microsoft's cloud computing platform, and the company is increasing the monetization of its Office 365 software online and its auto-learning offerings. The increase in market share in the cloud could reach $ 110 billion for Microsoft, Weiss said.

New consumer-centric technologies could also help drive Microsoft's growth. The company recently announced a new Xbox console and a Surface laptop. The new laptop brings the company's Windows 10 S operating system to market, designed to go head-to-head with Google's Chrome OS platform in the education market.

Weiss believes that the non-cloud parts of Microsoft's business should be worth more than the market is currently pricing. Investors are currently pricing non-cloud assets at eight times the free cash flow, while Weiss thinks it should be closer to 12 times. If you're right, that would add about $ 115 billion in value for Microsoft.

Finally, Weiss said that Microsoft's finances alone should justify a higher share price.

"Microsoft's current trading premium of 16% to the S & P 500 is in line with its premium over the past two years, however, its current total performance profile (CY16 to CY18 EPS CAGR plus current dividend yield) "Weiss wrote.

If Weiss is right, Microsoft could be one of the fastest growing shares in the technology sector. The company rose 12.72% this year. It currently trades at $ 70.54.