The Alibaba stock price soared as much as 10.6% today (Tuesday) to an intraday high of $84.45 after a top- and bottom-line beat on quarterly earnings.
For fiscal Q2 2016, Alibaba Group Holding Ltd. (NYSE: BABA) reported earnings per share (EPS) of $0.57 on revenue of $3.5 billion. Consensus estimates called for EPS of $0.54 on $3.35 billion in revenue.
It was another solid quarter of growth for Alibaba. Revenue jumped an incredible 32% year over year. Gross merchandise volume - the total amount spent over Alibaba's platforms - was up 28% from the previous year.
The company also reported having 386 million annual active users. To put that number in perspective, the entire population of the United States is just 319 million.
But the biggest reason the Alibaba stock price is climbing today is the company's mobile share. Roughly 62% of all transactions now happen on mobile devices.
In last quarter's Alibaba earnings, the company reported mobile transactions accounted for 55% of Alibaba's total transactions. That was up from 51% the previous quarter and 33% the previous year. Investors will be looking for further growth this quarter.
Alibaba has continued to invest heavily in mobile growth, so sustained growth is crucial to the Alibaba stock price.
"It beat expectations on mobile, so it really bodes well for the future of the company," Summit Research's Henry Guo told The Wall Street Journal. "Because increasingly customers use mobile to make transactions, that is really the key here."
The Alibaba stock price is now up nearly 35% in the last month. But the stock still has plenty of room to grow if you haven't bought in yet. In fact, BABA stock is one of the best long-term investments on the market today...
Why the Alibaba Stock Price Will Keep Climbing Now (NYSE: BABA)
At Money Morning, we've remained bullish on the long-term value of Alibaba stock throughout 2015 and continue to recommend long-term investors buy Alibaba stock.
Aside from strong quarterly financial growth, Alibaba continues to grow into a global company.
[mmpazkzone name="in-story" network="9794" site="307044" id="137008" type="4"]
Alibaba stock was up another 2.6% last week when the company announced the $3.6 billion purchase of the Chinese video streaming site Youku Tudou Inc. (NYSE ADR: YOKU).
It was just the latest in a string of acquisitions for Alibaba. In August, Alibaba spent $4.6 billion for a stake in the Chinese electronics chain Suning Commerce Group Inc. Over the past two years, BABA has purchased companies in numerous industries including entertainment, retail, tech, and even professional soccer.
It's part of Alibaba's plan to become more than just an e-commerce company. It's something that Alibaba Chairman Jack Ma recently shared with shareholders in a letter.
"Our key priorities for the next decade will be globalization, development of the rural economy, and big data," Ma said. "At this historic time, Alibaba Group must embrace change, invest in change, and drive change."
That vision for global growth is part of the reason Money Morning Executive Editor Bill Patalon recommends Alibaba.
"Alibaba's moves into entertainment, media, cloud computing - these are all part of a broad vision Jack Ma and his executive team has for Alibaba," Patalon said.
Still, some investors remain spooked by the company's pullback for the first nine months of 2015. But that drop is not a major cause for concern, according to Patalon.
"I knew that, as a hot IPO, there was every chance the stock could - and probably would - sell off," Patalon said. "It's a 'transformational' type of company, meaning its leaders are 'planting seeds' right now that will have big future payoffs."
Patalon says you can't look at Alibaba as a short-term investment. This is the kind of stock you buy and hold for a long period of time. The company has its sights set on the long term.
Follow us on Twitter @moneymorning. Like us on Facebook: Money Morning.
The Global Wealth Gap Is Now Alarmingly Wide: The top 0.7% of people in the world now control more than 45% of the entire world's wealth. But it's not just the lower class that's suffering. The global middle class is controlling less and less wealth every year...