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Satya Nadella
Microsoft CEO Satya Nadella at the 2017 GeekWire Summit. (Photo by Dan DeLong for GeekWire)

Editor’s note: Market value numbers in this story have been updated

Microsoft’s market value is around $745 billion Thursday morning, and it is in a tight battle with Google parent company Alphabet ($747 billion) and Amazon ($739 billion) for the title of the world’s second largest company by that measure, another sign of the Redmond, Wash. company’s return to the tech elite.

The companies all trail Apple ($902 billion) in market value, according to Nasdaq. Amazon took the mantle of second most valuable U.S. company earlier this year, but its value has fallen following attacks from President Trump about its contracts with the U.S. Postal Service and sales tax collection.

CEO Satya Nadella has rebuilt Microsoft’s status as a tech powerhouse on the back of a cloud-first strategy, a recent emphasis on artificial intelligence and downplaying Windows as the be-all-end-all of company success.

Last year, Microsoft achieved $20 billion in annualized revenue from its commercial cloud products and services, a self-imposed goal set by Nadella in 2015. Nadella set the cloud revenue goal as a way of changing perceptions of Microsoft both inside and outside the company. Instead of the decades-long obsession with Windows sales as the key indicator of Microsoft’s performance, focusing — and delivering — on a big cloud services revenue goal showed that the company was ready to move into a new era.

In 2016, Microsoft established the AI and Research Group, at the time the fourth engineering division inside the company. The group grew from 5,000 people to 8,000 in its first year. Last month, Microsoft reshuffled its engineering divisions to focus even more AI and cloud computing.

Several analysts think the positive momentum will continue for Microsoft, predicting the company will reach a $1 trillion market value before its tech rivals.

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