Buy Alibaba Shares: Before Investing Read This Guide
Published: 3 July 2020 by Valentina
The Chinese e-commerce giant is named after the character Ali Baba of The Thousand and One Nights. There may be 1,001 reasons to buy Alibaba shares, but there are also risks that should be taken into consideration.
This guide will try to provide an overall view of the company and the stock exchange by impartially analyzing the advantages and disadvantages of investing in a Chinese giant such as Alibaba.
Not only you should consider the asset, but also the the broker that acts as an intermediary in the negotiation.
We will start our analysis right from the broker: Remember that not all the intermediaries are trustworthy; therefore, we advise you to choose a broker with a regular license.
Here is a short list of the best Brokers (all with CySEC or FCA license) that allow you to buy Alibaba shares safely. By choosing eToro, you can also make automatic investments.
Min. Deposit: 50€
Min. Deposit: 100€
Min. Deposit: 50€
Min. Deposit: 250€
Min. Deposit: 100€
Min. Deposit: 250€
Alibaba: Origins and business
Alibaba Group is a Chinese multinational corporation specializing in e-commerce, retail, the Internet, and technology.
Founded on the 4th of April 1999 in Hangzhou by Jack Ma, the company provides wholesale and retail services through web portals, as well as the latest generation of technological services. It owns and operates a wide range of companies around the world.
Its initial public offering (IPO) reached $ 25 billion, the highest value in history.
Alibaba is the largest retailer in the world. The company hosts the largest B2B (Alibaba.com), C2C (Taobao), and B2C (Tmall) markets in the world.
Its online sales and profits have surpassed all US retailers (including Walmart, Amazon, and eBay) put together.
All this makes you understand that buying Alibaba shares could be an excellent investment.
But let’s examine how to invest in this Chinese giant.
How to buy Alibaba shares
Alibaba is listed on the NYSE and on other exchanges such as the Hong Kong one; for this reason, it seems a complicated asset to negotiate, considering that it is not listed in Italy.
But this is not really true: Now thanks to online trading, it is possible to invest in any stock market directly from your PC.
The only thing to pay attention to is the intermediary chosen to invest: the broker.
Online brokers offer contracts called CFDs (Contracts for Difference) that have the same price as the asset they represent and allow you to invest upwards or downwards and earn (if the forecast is correct) in any market scenario.
These brokers do not charge commissions but only earn from the spread: A small difference between the purchase price and the sale price of an asset.
But CFD brokers are not all the same, there are differences that deserve further explanation.
Buy Alibaba shares with the best Brokers
Although the brokers may all look the same, they are not. There are two big differences between the brokers that you can find online: the illegal ones and those with a regular license.
Obviously, we will not discuss about illegal brokers, which operate from fiscal paradises without any authorization: Just avoid them!
We want to speak instead of the serious platforms, those that respect the rules, providing the FCA or CySEC license.
In the next paragraphs, we will explain the characteristics of the best brokers to buy Alibaba shares:
- You can invest both upwards and downwards
- No commissions charged.
- The minimum deposit does not exceed 250 euros.
- They allow you to trade on many markets: Stocks, Indices, Commodities, etc
Now, let’s find out in detail the services offered by the best brokers on the market. The ones most suitable to invest in Alibaba shares in total safety:
eToro: Simplicity and Automatic Trading
eToro is the broker with more users in the world and this success is due to its very intuitive platform and revolutionary patent.
The FCA license protects investor from the risk of scams and eToro has numerous other licenses which confirm its reliability.
The trading platform is certainly among the most intuitive on the market.
Below, in the image of the Alibaba stock, you can clearly see how it works:
To invest, just click on the blue button, decide how much to invest in the operation and whether to buy or sell the asset.
Statistics, indicators, and graphics complete the platform which is appreciated even by the most demanding traders.
But the revolutionary patent we were talking about initially is a system that allows you to make automatic investments, called Copy Trading.
Copy Trading allows you to copy the transactions on the market of the best traders in the world (on eToro) in a totally automatic and free way.
To use Copy Trading, it is necessary to follow these steps:
- Register on eToro with the link at the end of the review
- In the section “people”, choose the traders you want to copy, based on their returns
- With a click, Copy Trading will do exactly the same operations of the chosen traders in your account.
- At this point, you will get the same returns as these trading experts (of course, in relation to your investment), without doing anything else.
Here are some of the best eToro traders (that can be copied), with their returns on investment from the last year:
Click here and choose which traders to copy
Both Copy Trading and “manual” trading can also be tested on a free Demo account, without risks thanks to the use of virtual money.
Click here and sign up for free
For more details you can read our full eToro review.
ForexTB: Trading Course and Free Signals
ForexTB is a broker that is rapidly reaching an incredible reputation despite its young age.
Obviously, it is an intermediary authorized by CySEC, which allows it to operate throughout Europe and the UK.
Below, we can see the platform offered by ForexTB, which shows the Alibaba stock listed on the NYSE in a very simple way:
For the most demanding investors, ForexTB also offers the famous Metatrader 4, a more technical platform.
Traders who approach the world of investments for the first time, will find the Trading Course by ForexTB very useful. It is one of the best beginner courses in the world and it’s free. Download it immediately from the link below:
Click here and download the trading course for free
In support of the traders’ operations, ForexTB also provides the course Trading Signals for free.
These are operational indications developed by the famous Trading Central and sent directly to traders when the conditions for entering the market are met.
These Signals have a success rate of over 70%
To receive free ForexTB Trading Signals, click here
Trade.com: Free Training and Minimum Deposit
Trade stands out in the market because of its focus on the investor, with truly unique support and assistance services.
Registered with a FCA license, it operates in many countries beyond the UK.
Below, you can see the trading platform of this broker, with the Alibaba asset and all the information necessary to buy Alibaba shares (or to sell them):
Although it is very clear and simple, the Trade.com platform is complete with all the indicators and charts necessary for the technical analysis of an asset.
Trade.com has created a training area divided into levels: Basic, Intermediate and Advanced. Thus, each investor will find free information corresponding to his level of preparation.
For beginners, there is a very useful free course on trading (ebook). Trade.com offers it for free and here is the link to download it:
Download the free course by clicking here
The focus on the investor is also evident from the deposit threshold: With Trade.com just 100 euros are enough to open a trading account.
If you prefer, you can “train” for free on the Demo account offered by Trade.com without risks. The Demo account is the same as the real one, the only difference is that you will invest virtual money.
Click here to sign up for free
If you want to know more, you can read our Trade.com review.
Buy Alibaba shares: Real-time quotes
Is it worth to buy Alibaba shares?
We could answer the question simply by saying yes, but investments are a complex thing and the answers are never so straight.
We need to consider what makes a company a good investment and Alibaba certainly has many arguments in its favor.
Among these, we can add the 1.4 billion investment that Alibaba is making in the development of artificial intelligence for Tmall Genie, the company’s speaker line.
Alibaba will carry out this research both in the context of consolidated business initiatives, such as the Alibaba Cloud platform, as well as in research centers, such as the DAMO Academy. The effort includes natural language processing, personalized user experiences, and advanced interface development.
In other words, Tmall Genie can be compared to Amazon’s Alexa ecosystem devices or Google Home.
This premise was necessary to understand the commercial strength of this group, which is following the footsteps of its American rivals.
So, back to the question: Yes, it is worth to buy Alibaba shares. Now, we just need to evaluate the time frame of the investment.
- Is it worth investing in the short, medium or long term? Are there any pitfalls in such an investment?
The most important pitfalls come from competitors. Alibaba operates in many sectors; therefore, has many competitors, not only in China, but also in other countries. Here is the list of some of them:
- American Express
The most dangerous for Alibaba are the Chinese ones, which have the same pool of loyal customers.
Buy Alibaba shares: Forecast
Alibaba Group shares, listed on the NYSE with the BABA ticker, received a purchase valuation from Mizuho analysts.
The main analysts and investment banks agree with this assessment. Alibaba is trying to get out of a purely “Chinese” scheme in order to move towards the global market in a more “international” way and this is bearing fruit in terms of growth.
The performance of the stock during the last months has been uncertain, but it is a complicated moment for the whole economy. Alibaba is not immune to crises, but so far it has managed to ride this historic moment in the best way, without wavering too much.
Some analysts have expressed even too optimistic forecasts for the BABA stock for the coming months, but in general: Buying Alibaba shares is a good investment especially in the medium and long term.
Alibaba shares target price
EToro Trading Desk analysts issued purchase ratings for Alibaba Group. Their twelve-month average Target price is $ 246.22, suggesting that the stock could grow 14.39% in a year.
China is one of the few areas in the world where Amazon doesn’t dominate e-commerce.
It is the most populous country and its retail market is dominated by Alibaba and some other Chinese groups. Alibaba reaches incredible numbers, with nearly one billion users in its e-commerce and digital payment services markets.
The company’s goal is to serve two billion customers by 2036: Buying Alibaba shares is certainly an excellent long-term investment.
Before jumping headlong into purchasing Alibaba shares, we recommend that you test the trading platforms in Demo, so as to choose the best that suits your trading strategy.
Here are the official links to access the Demo accounts:
- Access the eToro Demo account for free by clicking here
- Register for free on ForexTB and access the Demo account from this link
- Access the Trade.com Demo account for free by clicking here
Yes, even if you need to focus on a medium and long-term strategy for a good return on investment.
The easiest way to buy Alibaba shares is to use CFD Brokers that allow you to invest without paying commissions.
eToro is the best CFD broker to buy Alibaba shares and that allows you to make automatic investments, too.
The target price for a 12-month Alibaba share is $ 246.22