Alibaba's stock goes nuts after a red-hot quarter

Alibaba reported quarterly results on Tuesday that blew past analyst expectations, and now the stock is surging.

In pre-market trading, shares jumped by as much as 10% to the highest levels since mid-July.

The Chinese e-commerce giant posted sales of 22.2 billion yuan ($3.5 billion) for its fiscal second quarter ended in September, up 32% year-on-year. Analysts had estimated sales of 21.3 billion yuan.

Net income came in at 22.7 billion yuan.

The metric that many analysts watch is Gross Merchandise Volume (GMV), or the total value of transactions made across the Alibaba marketplace. That rose 28% year-on-year to $713 billion yuan ($112 billion).

"Our ecosystem continues to thrive," the company said of its China retail marketplace. "User engagement is healthy with more buyers purchasing across more categories."

That's a departure on the outlook for the Chinese consumer from a company like Yum Brands, which spun off its business in the country.

Alibaba shares are down about 27% year-to-date.

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