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How to buy Alibaba shares
This guide includes a history of Alibaba, who they are, what they do and how their stock has performed in the past. Read on to discover if now is a good time to invest and the best platforms to use to do so.
Compare the best Alibaba trading platforms
If you have all the information you need already, you can head straight to one of the brokers below where you’ll find all the most popular shares, including Alibaba. If you’re not ready to do that just yet, scroll down to keep learning about Alibaba.
How to buy Alibaba stock, a step-by-step guide
The process of buying shares in the stock market isn’t massively complicated, so don’t worry even if you’re new to investing. These are the steps to follow in order to complete your investment:
- Choose a broker. You need to use an online brokerage platform. There are many different options to choose from, each with their own unique benefits and drawbacks. The comparison table above can help you select the right broker for you, and you can head to our comprehensive broker reviews if you’re still unsure.
- Create an account. Once you’ve selected your broker, simply go to their website and create an account. The steps required for this will vary from platform to platform, but generally you can expect to have to provide your name, email address, phone number, and some form of photo identification.
- Deposit funds. Log into your broker account and select the option to deposit funds. Depending on your broker you’ll have a variety of payment options available; most brokers accept bank transfers and debit card payments, but not all accept e-wallets such as PayPal. Select your preferred payment method and deposit the amount of money you wish to invest in Alibaba shares.
- Place an order for BABA stock. Now navigate to the broker’s buying stocks page (a link to this can be found in the menu on the website). Here you’ll be able to search for Alibaba’s ticker symbol (BABA) and see the current price at which the stock is trading. If you’re happy with the price, enter the amount of shares you wish to buy and place your order.
- Execute your order. Once you have placed your order, your broker will automatically execute it for you and your Alibaba shares will be listed in your account. Congratulations, you’ve just bought shares in Alibaba!
What is Alibaba? And should I invest?
Alibaba Group (NYSE: BABA) is a Chinese technology company that began life as an online B2B marketplace and is now one of the largest companies in the world.
Jack Ma founded Alibaba in his apartment in June 1999. Originally operating as a China-focused B2B marketplace through alibaba.com, by the end of 1999 it had already received millions in investment and has grown into a sprawling retail and technology giant. Its online sales profits were already well in excess of its US equivalents, including Amazon, by 2015.
The early years of Alibaba saw almost constant success. The group holds the record for the biggest initial public offering (IPO), raising $25bn when it first listed on the New York Stock Exchange in 2014. It also owns 33% of Ant Group, China’s largest financial technology company, which was expected to break that IPO record in a listing set for the end of 2020 until the government intervened.
Up until the end of 2020, it was always a great time to buy BABA stock. The picture is now a lot more murky thanks to moves made against the company by the Chinese government, which seems to be aiming to curb the power of Ma after China’s richest man spoke out against financial regulators in 2020. Any investor will now need to consider how severe and long-lasting the effects might be before buying.
How has the company performed in recent years?
For a long time, Alibaba was a growth machine. BABA shares peaked at almost $310 in October 2020, a nearly five-fold increase in price from its auspicious New York debut. But much of Alibaba’s 2020 growth was wiped out by the launch of a Chinese investigation into the company, and investors must now consider the effects of the regulatory crackdown.
China had largely left its big tech firms alone throughout Alibaba’s period of extreme growth, using them as an example of great Chinese entrepreneurship and success on the world stage. Suddenly, in a series of possibly politically motivated moves in reaction to Ma’s criticism of financial regulators and state-owned banks, the government stepped in to force the cancellation of the Ant Group IPO and then launched an anti-trust investigation into Alibaba itself.
Those moves wiped almost a quarter off the value of BABA in the space of a couple of months. Even that only dropped the share price back to where it was at the beginning of the year, so left to its own devices Alibaba may well still present significant opportunities. The big question is to what extent it will have to deal with regulatory battles or further moves against its empire and how long that uncertainty will last.
Is it a good time to buy Alibaba shares now?
The biggest factor to consider before investing is the Chinese government’s attitudes towards Alibaba and the technology industry in particular. It’s a government that can be unpredictable and it’s vital to be aware of current policy that you can take into account before investing. Similarly, geopolitics between the US and China has had a direct impact on Chinese companies, so the global situation should be considered as well.
Government moves against Jack Ma and Alibaba in late 2020 are an example of abrupt changes in policy that can cause dramatic shifts in the share price. While BABA shares have experienced this kind of volatility before and bounced back stronger than ever, which could make Alibaba a good investment opportunity, it will inevitably carry risk until the picture clears. At the very least it’s worth being cautious until the government offers more clarity about the types of charges Alibaba faces as part of the anti-trust investigation.
To keep track with the most up to date Alibaba stories, you can follow our news and market analysis through the links below.
Ali Baba stock price hits record highs despite Trump’s threats to blacklist Ant Group
Buying, selling and trading Alibaba shares for beginners
What to do before buying shares
You should always take the time to research a stock fully before investing your money, especially if you haven’t bought shares before. The more knowledge you have, the better your chances of making a wise investment.
With that in mind, here’s a checklist to run through before investing in Alibaba shares.
- Research the company. You should always examine the fundamentals of a company before buying its stock. What is Alibaba? How did the company get its start? How did it grow? Is Alibaba’s revenue and profit growth picking up? Is the company innovating? The more you know about Alibaba, the better positioned you’ll be to make smart investment decisions.
- Make sure you understand the basics of stock investing. Before getting involved in the stock market, make sure you have an understanding of how it works. This will ensure that you have more clearly defined goals and have thought through how you will achieve them.
- Decide between share dealing and CFD trading. Choose the type of investment strategy you want to pursue, and make sure you have carried out the necessary fundamental or technical analysis for share dealing and CFD trading respectively.
- Set the size of your budget. The golden rule of investing is never to risk more than you can afford to lose. Not every investment you make will result in a profit, so it is important to set a budget that not only allows good potential for capital growth, but also protects against overly damaging losses.
- Find the right broker. Individual brokers each have their own pros and cons. Some will have low fees but have a user interface you struggle to understand, whereas others may be a bit more expensive but come with a range of features that you want to take advantage of. Our broker reviews can help you find the right platform for you.
- Examine broader market conditions. No stock exists in a vacuum, and it’s always important to analyse the general trends of the stock market as a whole before investing. If a bear market is setting in and stock prices are falling, it’s best to wait it out and invest your money later when the stock is cheaper. If, however, the market is looking bearish, you’ll want to make your investment quickly to get the maximum benefit from rising stock prices. Our news section can help you keep on top of movements in the financial markets.
What is the difference between buying, selling, and trading shares?
If you’re new to stock investing, then it’s important to understand the basics of how to buy, sell, and trade Alibaba shares. Here’s a quick run-through of what’s involved in each.
The best place to buy Alibaba stock is through a broker. Log in to the platform and place an order for Alibaba stock, as outlined in the steps further up this page. Ideally you want to time your investment when the stock’s price is low so that you can profit by selling the shares after they increase in value.
When you sell any Alibaba shares you have bought, you’ll want to do so at a higher price than the one at which you bought to earn a profit.
When you sell is up to you. You might decide to hold for a long period of time, hoping to benefit from the company growing steadily throughout. Or, if you see that Alibaba’s stock is already up a lot compared to the price you bought it and you’ve noticed that the stock market is starting to fall, it might make sense to sell and take your profits to invest elsewhere. Equally, if the stock has fallen since you bought it and looks set to fall further, it might be a good idea to cut your losses by selling your shares.
Trading is the same process as buying and selling shares, it’s just done over shorter periods of time with the aim to make small profits on a regular basis. This means that you can make money faster and spend your profits in your day-to-day life – however, on the other side it means you can lose money faster as well. For inexperienced investors, we generally recommend making investments for at least 6 months to a year instead of making trades in quick succession.
You can trade Alibaba shares through buying and selling shares, or by trading with CFDs. These allow investors to speculate on stock prices and trade with leverage in pursuit of bigger gains. CFDs trading is explained further in the next section, but it is worth noting that beginners should avoid trading with leverage. It comes with large risks and is best left to experienced investors.
Share dealing vs CFD trading
When it comes to investing in any stock, the two options you have are share dealing and trading. Which one of these methods to opt for largely depends on your investment timeline, with investors thinking long term tending to go for share dealing, and those looking for short term gains pursuing a more aggressive trading strategy.
Here’s a quick summary of the two approaches, and the pros and cons of each.
Share dealing refers to the practice of buying and holding shares in a particular company over the long term. When investing like this, you’re seeking to profit either from dividend payments or an increase in the stock’s price over time.
When investing your money this way, it is important to do thorough fundamental analysis of the company in which you are investing. You want to put your money in a stock you believe will trend upwards over time, even if there is some market volatility along the way, rather than get distracted by shorter term peaks and troughs.
- Can build wealth over time to achieve financial goals
- Don’t need to be very reactive to short-term market movements
- Some stocks will give you an income through regular dividend payments
- Takes a long time to realise any profits
- Your capital is tied up in stocks and cannot be used for other investments
If your aim is to generate profits in the short term, then you might be better off trading shares than holding them in your portfolio. Stock trades like this are executed using CFDs (contracts for difference), which allow investors to trade against the value of a stock without having to take ownership of it. When CFD trading, investors are looking to buy and sell stocks fast to profit from short-term fluctuations in value.
One aspect of CFD trading that many investors find attractive is that they allow you to trade with leverage. This means you can place large trades while only putting up a fraction of the value yourself – for instance, if a platform offered leverage of 1:10, you could put £10 into BABA shares and be able to trade £100 worth. This can maximise profits if the market moves in your favour, but be careful as it can also lead to heavy losses.
When trading using CFDs, it is key to be skilled at technical analysis and reading stock price charts. As you’re trading stocks quickly and frequently, the fundamental strength of the company in which you’re investing isn’t as important as being able to predict how its stock price will rise and fall minute-by-minute.
- Can generate fast profits if you read the market right
- Some platforms allow you to trade with leverage
- Prevents your capital being tied up so you can take advantage of investment opportunities
- Trading with leverage is risky and can lead to big losses
- Doesn’t necessarily generate growth over the long term
Consider which approach suits you best and craft an investment strategy that works for you. If you need more information, then simply take our stock trading course and read our guide to CFD trading to get you up to speed.
If neither of these options appeal to you, then you can find a variety of other ways to invest in BABA stock on this page. If, however, you’re ready to invest straight away, simply select one of the brokers in the table above and get started.
How to choose a broker
With the wide variety of online brokers available these days, it can be hard to figure out which is the best service to go with. Our comparison table and in-depth reviews can help you cut through the noise, but by and large these are the aspects you should be considering when selecting a broker:
- Range of stocks available. The most important thing is that you can actually use the broker to buy the shares you’re looking for. Some brokers offer more stocks than others, and many will allow you to trade other assets, such as forex and commodities.
- Fees and commissions. You want to keep as large a chunk of your profits as you can, so it’s important to make sure your broker doesn’t charge high fees that can eat into your profits.
- Regulation. You should only use regulated brokers to place trades and buy shares. Unregulated brokers can be risky and offer little to no protection if the business were to fail while you had funds in your account.
- Payment methods available. You might want to get Alibaba shares using a specific payment method, such as PayPal. Not all brokers accept every payment method, but using our comparisons you can search only the brokers that support the option you’re looking for.
- Reputation. One of the strongest indicators of a broker’s reliability is the reputation it has with the customers who have used it. Brokers are online businesses, and as such many user experiences can be found online. You can check these out in addition to our reviews to make sure you choose the right platform.
- Customer service. As you’re going to be investing your money using the platform, you want to check that the broker offers good customer service in case you have a query or something goes wrong.
Latest Alibaba news
What to expect from Ant’s pending IPO disclosure
Alibaba’s net income contracts sharply to £367 million in the fourth quarter
Stock trading courses
Long-term Stock Investing
Short-term Stock Trading
Fact-checking & references
Our editors fact-check all content to ensure compliance with our strict editorial policy. The information in this article is supported by the following reliable sources.
Invezz is a place where people can find reliable, unbiased information about finance, trading, and investing – but we do not offer financial advice and users should always carry out their own research. The assets covered on this website, including stocks, cryptocurrencies, and commodities can be highly volatile and new investors often lose money. Success in the financial markets is not guaranteed, and users should never invest more than they can afford to lose. You should consider your own personal circumstances and take the time to explore all your options before making any investment. Read our risk disclaimer >