Microsoft gained a lead over Google parent Alphabet for the first time in three years, becoming the third most valuable company following market close on Tuesday.

Over the past 12 months, Microsoft’s stock price continued its rally and surged by 40 percent to $98 per share. Valued at $753 billion, it finally surpassed Alphabet’s $739 billion market capitalization. It is still behind online retailer Amazon’s market value of $782 billion and Apple’s $924 billion as the largest publicly traded US companies.

Microsoft just surpassed Google’s parent company Alphabet in market cap for the first time in three years $MSFT $GOOGL https://t.co/1Li6LneJNI

— Business Insider (@businessinsider) May 29, 2018

More investors were willing to bet on Microsoft’s cloud-first strategy under current CEO Satya Nadella. When he assumed the top post in 2014, the tech company focused on cloud computing instead of manufacturing phones. Since then, its stock price has been on an uptrend but continued to trail Google’s after the latter’s restructuring in 2015.

Microsoft and Google continue to be direct competitors in several technological advancements, such as artificial intelligence and cloud computing. Second only to Amazon Web Services, Microsoft’s public cloud business under the Azure platform and Office 365 subscription remains relatively bigger than Google’s.

Although the tech giant has always been associated with the Windows operating system, Microsoft announced a reorganization of its legacy Windows and Devices Group back in March. This prompted the company to reallocate resources from Windows to its cloud infrastructure and artificial intelligence businesses.

It looked like the gamble paid off as third-quarter revenue increased by 16 percent to $26.8 billion compared to prior year, largely driven by the Microsoft Cloud segment. Net income amounted to $7.4 billion, 35 percent higher than 2017’s third fiscal quarter.  

In Tuesday’s FirstFT: the race to a trillion-dollar market cap for Apple, Amazon, Alphabet and Microsoft https://t.co/vjSsUgvMXE pic.twitter.com/gmbCNO9W0E

— Financial Times (@FinancialTimes) May 29, 2018

Back in March, investment bank Morgan Stanley gave a bullish outlook on Microsoft’s growth forecasts, underscoring the increasing preference of several businesses for cloud computing over local network services. According to the analysts, the software company is on track to reach the $1 trillion market cap within a year’s time if it maintains its dominant position on the public cloud market. Furthermore, its stock price was expected to reach $130 from the previous forecast of $110.