Alibaba Group Holdings Ltd. (BABA), the Chinese ecommerce giant, announced this week it is buying back $6 billion worth of its shares.

In conjunction with its earnings report issued Thursday, the China-based company said it will acquire the shares over the course of two years with the share repurchase plan primarily aimed at offsetting dilution from its equity-based compensation programs. The new program replaces the existing stock buyback program on the books.

Room to Grow

The share repurchase announcement comes at a time when the stock of Alibaba has been surging and some Wall Street watchers think it has more room to grow. Recently, shares of Alibaba were up 2.8% or $3.50 to $124.75 a share. The shares have been climbing all year as analysts bet its efforts to expand beyond the ecommerce will pay off. (See more: Alibaba Facing More Cloud Competition From Rival Tencent.)

For the first three months of the year, revenue at Alibaba increased 60% thanks to an increasing number of users in China. During the quarter, more than 450 million consumers shopped on Alibaba or used its websites with the average annual amount spent increasing by around one third. Revenue for the quarter came in at $5.6 billion, higher than Wall Street expectations, although its adjusted earnings per share of 4.35 yuan was lower than the 4.51 yuan average analysts as polled by Bloomberg were looking for. (See more: Alibaba Contrarian: Ignore Bulls, Sell This Stock.)

Core Strength and Diversity

“We reported another excellent quarter, with revenue growth accelerating to 60%, the highest growth rate we’ve achieved since our IPO. We also reported very strong fiscal year revenue growth of 56% with annual non-GAAPfree cash flow​ of approximately US$10 billion,” wrote Alibaba Group Chief Financial Officer Maggie Wu in a prepared statement.

Wu said the results “demonstrate the strength of our core businesses, as well as the positive momentum of our emerging businesses, including cloud computing, where we continue to see strong growth and market leadership.” Investors weren’t pleased with the earnings on Thursday, sending the stock lower, with the losses recouped in Friday’s action.

With the China ecommerce market seemingly getting saturated, at least if you exclude Alibaba’s March-quarter results, the company has been branching into new markets including cloud computing with AliCloud and digital payments with AliPay. The company said as of March, paying customers for its cloud business stood at 874,000, marking an increase of 109,000 clients and driving revenue growth to 103%.

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