GameStop's stock surged 11.4% in Tuesday's after-hours trading session, following the company's surprise third-quarter profit. The video game retailer reported a net income of $17.4 million, or $0.04 per share, compared to a net loss of $3.1 million in the same period last year. This unexpected profitability, combined with lower expenses and cost-saving efforts, has reignited hopes among retail traders for another meme stock rally.

Despite a 20% year-over-year decline in net sales to $860.3 million, missing analysts' expectations, GameStop managed to swing to a profit. This was primarily driven by a reduction in selling, general, and administrative expenses, which fell from $296.5 million to $282 million. Additionally, the company completed an at-the-market equity offering during the quarter, raising approximately $400 million in gross proceeds.

The strong stock price movement is reminiscent of the meme stock frenzy that gripped GameStop in 2021, when retail traders, coordinating on online forums, bought up shares and squeezed short sellers, sending the stock skyrocketing. While the company's financial performance remains challenging, the unexpected profitability has reignited enthusiasm among retail traders, who are betting on another potential short squeeze and meme stock rally.