Microsoft has briefly surpassed Google's parent company Alphabet in market value for the first time in three years, suggesting a strong bounceback from a company widely regarded to have lost its way after Bill Gates left his post.

At the end of Wednesday's regular trading session, Microsoft became the world's third most valuable firm, beating Alphabet's market value of US$739 billion ($1.06t). The two companies swapped places with Alphabet taking the number four spot.

Microsoft's stock price is now at US$98 per share - up 40 per cent in the past year.

Apple retains its spot as the most valuable company and Amazon holds the second position.

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The changeover in places has only intensified the race between the four companies to become the first US business ever to land a trillion-dollar market cap.

Google and Microsoft have regularly swapped spots in market cap ranks in the past decade but Alphabet has been in a comfortable lead over Microsoft since Google was restructured into the umbrella company in 2015.

This week, both Microsoft and Alphabet experienced a minor decline but the bigger drop recorded by Google aided Satya Nadella's company. Both businesses, which are long-time rivals, compete directly in artificial intelligence, speech recognition and cloud computing. However, Microsoft has suffered a publicity problem of late.

The company's former chief executive Steve Ballmer, in one of his last acts as Microsoft's boss, notoriously pushed through a €5.4bn ($9b) acquisition of Nokia's mobile phone business, in a desperate attempt to take on its old rival Apple.

Poor sales and a lack of developer backing, a necessity for making sure the phones came with apps and tools that consumers would want to buy, meant that within months of Nadella taking over, he began to dismantle the once leading mobile brand.

Microsoft's new focus on the cloud and services such as Azure, which Nadella led before stepping up as chief executive in 2014, has contributed to the company's market value, with its recent advancements boosting investor confidence.

The company's most important divisions have turned out to be its Office software such as Word, Excel and Outlook, along with the cloud. But instead of demanding victory, Nadella now talks about helping others.

Speaking on his successes in an interview with the Sunday Telegraph, he said: "What we have learned is to just be consistent in building trust and just making sure that you're not just measuring your success by your own success."

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While Google is also betting big on its cloud services, it has not proved as popular as Azure.

Analysts believe that Microsoft could achieve the trillion-dollar market cap by the end of this year, and if the growth of Azure continues at this pace, the company could double its market value in a few years.

Apple is also in the race to become the world's first trillion-dollar company and it has been considered the leader. But given the recent growth of Microsoft, the software giant is well positioned to achieve this market milestone first.