AWS Powers Amazon's Surging Market Cap, Now At $702.5 Billion

Amazon is officially the third most valuable company in the U.S.

The retail giant surpassed Microsoft in market capitalization for the first time on Wednesday, climbing to $702.5 billion.

Amazon and Microsoft are leaders in their respective industries – Microsoft in desktop and productivity software and Amazon in retail. But the two companies directly compete in the cloud, and business is booming for both companies.

[Related: Reports: Amazon Developing AI Chips To Go Head-To-Head With Apple, Google]

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Amazon earlier this month reported financials around its cloud business for the first time. Amazon Web Services (AWS) pulled in $17.459 billion in sales in 2017, up an impressive 43 percent from 2016's $12.219 billion in sales.

At the same time, Microsoft said that its Azure revenue grew 98 percent year over year and reported "Intelligent Cloud" revenues, a segment that includes Azure, of $7.8 billion last quarter.

Amazon, for its part, has almost quadrupled in value over the past three years. The company has attributed 10 percent of its total revenue growth to AWS.

Amazon’s market capitalization sat at $702.5 billion on Wednesday evening; the company's shares were trading up $8.65 (0.60%) to $1,459.70 in trading late Thursday. Microsoft was worth $699.2 billion after the market closed on Wednesday.

Amazon still comes in behind Apple, worth $849.2 billion, and Alphabet, Google's parent company, which stands at $744.8 billion as of Wednesday evening. Microsoft currently holds fourth place.

At the close of market on Wednesday, CNBC dubbed Amazon CEO Jeff Bezos the richest man of all time, beating out Microsoft founder Bill Gates, who had an estimated fortune of $100 billion in 1999. Bezos holds 78.9 million shares of Amazon stock, and currently has an estimated net worth of $118 billion, according to the Bloomberg Billionaire's Index.