Baird analyst Colin Sebastian expects upside in Alibaba shares after the company's Q1 results "beat elevated expectations."

The 56% year-over-year revenue increase topped the 53%-55% "whispers" as Alibaba's core commerce segment continues to benefit from strong domestic online spending trends, Sebastian tells investors in a first glance post-earnings research note. The analyst says the results do not change his positive thesis at first glance. He has an Outperform rating on Alibaba with a $170 price target.

The stock in premarket trading is up 6%, or $9.00, to $168.50 following the earnings report.