For the last few years, US retail giant Walmart has been trying to beat Amazon at its own game: online retail. In a surprising turnaround this week, Amazon has beaten Walmart at its own game, becoming the highest-valued company in retail globally.

Amazon overtook Walmart on Thursday to become the largest US retailer by market capitalisation.

While Walmart still dwarfs Amazon in terms of sales, with significantly higher annual revenues, Amazon’s market cap is now $265 billion, well ahead of Walmart’s $234 billion. To put this in even more perspective, JP Morgan’s market cap is $258 billion.

Amazon announced a rare profit on Thursday night, sending shares soaring nearly 20 per cent in after-hours trades. Not only did this increase the e-commerce giant’s market capitalisation by $40 billion, it also boosted Jeff Bezos’ wealth significantly. A surge in shares added more than $7 billion to the founder and chief executive’s fortune in less than 45 minutes.

As the shares climbed, they surpassed those of Walmart, making Amazon (which turned 20 this month) the world’s most valuable retailer.

Analysts had been expecting a loss, but Amazon stunned investors posting a profit of $92 million or 19 cent per share for the three months to June 30th.

The company began as an online bookstore, but diversification into e-book readers, drone delivery and cloud computing services has seen its revenues and profit climb. Much of its growth, especially in the most recent quarter, is attributed to Amazon Web Services (AWS), the company’s data centre business.

Basically it provides businesses with data centre space, removing the need for them to build their own – and very costly – data centres and servers. Bezos believes this could one day become the biggest part of Amazon.

While Walmart has been trying to improve its online sales, dabbling in same-day delivery and trying to crowdsource package drop-off among customers, it would seem Amazon has raised its game by selling services – data centre services to be precise.