Amazon on Wednesday beat out Microsoft to become the third most valuable company in the world.

The Seattle-based e-commerce giant's price per share rose $36.54 – 2.6 per cent - on Wednesday, closing at US$1,451.05 ($1,957.79).

That gave Amazon a market capitalization of $702.5billion, surpassing that of another Washington state-based tech giant, Microsoft, according to the Daily Mail.

Amazon's stock surge has catapulted its founder and CEO, Jeff Bezos, 54, to the top of the list of the world's richest humans.

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As of Thursday, Bezos' net worth was valued at US$121.3 billion, according to Forbes.

The company founded by Bill Gates saw its shares rise US$1.40 on Wednesday – 1.6 per cent – to US$90.81.

Gates, 62, will have to take solace in being just the second wealthiest person in the world. His net worth is valued at just over US$91b.

Investor Warren Buffett, French magnate Bernard Arnault, and Facebook founder Mark Zuckerberg round out the top five wealthiest people.

Amazon still has a ways to go to catch up to the two most valuable publicly traded companies in the world.

Apple, the iPhone maker, leads the pack with a market capitalization valued at US$849.2b, according to The Seattle Times.

Alphabet, the parent company of search engine Google, is the second most valuable firm with a market cap of US$744.8b.

Facebook, the social network, is the fifth most valuable publicly traded company with a market capitalization of US$521.5b.

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Analysts say that Amazon's stock price continues to climb because the company is expected to grab an even larger share of the retail market in the months and years to come.

The company's revenue has grown by at least 19 per cent each year for the past decade – an unprecedented level of success for firms with sales in excess of US$1b.

Last month, Microsoft beat Wall Street's profit forecast, helped by growth in its cloud computing business, but took a US$13.8b one-time charge due to the new US tax law.

Stock of the world's largest software company have risen almost 50 per cent over the past 12 months.

Since Chief Executive Satya Nadella took the helm in 2014, Microsoft's cloud business - which includes products such as Office 365, Dynamic 365 and Azure - has emerged as a major growth area.

Revenue from what Microsoft calls its intelligent cloud segment rose 15.3 per cent to US$7.8b in the company's fiscal second quarter, including 98 per cent growth for Azure.

Analysts on average had expected US$7.51b, according to Thomson Reuters I/B/E/S.

Amazon Web Services is the leader of the US$14.4b cloud computing market with more than 31.8 per cent market share, but Azure has been growing fast and holds the No. 2 position with 13.9 per cent of the market, according to 2017 third quarter estimates by research firm Canalys.