Alibaba Stock Price (BABA)

The Tradu Alibaba stock trading guide

Understand this large-cap stock and how to use it in your trading strategy.

About Alibaba

Alibaba Group Holding Limited primarily provides Chinese and international merchants with technology infrastructure and marketing that helps them reach their users and customers. Ranked #9 on the Kantar Most Valuable Global Brands 2022 and #54 on the Forbes Global 2000, it owns leading B2B, B2C and C2C marketplaces – namely, Alibaba.com, Tmall and Taobao.

Alibaba was founded by Chung Tsai and Yun Ma on 28 June 1999 in Hangzhou, the People's Republic of China, where it remains based. It's now one of the world's largest retailers and e-commerce companies. In January 2018, it became the second Asian company to achieve a valuation of $500 billion.

Alibaba first went public on the Hong Kong Stock Exchange in 2007 but delisted just five years later in 2012. The company then went live on the New York Stock Exchange in 2014 under the ticker BABA, priced at $68 per share and raising $25 million – the largest ever IPO at that time. In 2019, Alibaba returned to the Hong Kong Stock Exchange under the ticker 9988, priced at $22.5 per share and raising $12.9 billion. Alibaba Group reported a net income $10.6 billion on top of revenue of $126.5 billion in the fiscal year ending March 2023, as well as earnings per share of $0.50 – up 11% from $0.45 the year before.

What influences Alibaba share price?

Gaining a strong understanding of the main factors that drive BABA stock prices will help you trade with confidence. Together with fundamental factors, several external factors are at play, including the following:

• Financial performance: Like any other company, Alibaba share prices depend on financial factors such as revenue and income. This means that stock prices are particularly susceptible to change around the key quarterly periods when financial reports are published.
• Competition: Domestic rivals such as JD.com and Pinduoduo pose a threat to Alibaba's continued success. And while Alibaba dominates e-commerce in China, Amazon leads in most other growing markets around the world.
• News: Public sentiment can have a tremendous effect on shares, as demonstrated when BABA stock prices dropped following news of anti-monopoly probes against the tech giant in 2020.

How to invest in Alibaba stock?

There are several ways you can invest in Alibaba. You should consider which method best complements your overall trading strategy and choose accordingly.

The most straightforward option is to buy BABA stock directly. This lets you profit from strong performance, with the freedom to sell whenever you sense an opportunity. As such, this method is better suited to a long-term trading strategy.

How to trade Alibaba stock

Alternatively, you can speculate on BABA share price movement using financial derivates such as contracts for difference (CFDs).

In contrast with stock ownership, derivatives allow you to profit from both bearish and bullish markets. Another key difference is that they're leveraged. You can open larger positions from smaller deposits, amplifying your potential profits as well as your losses.

Learn more about these derivatives with our expert guides:

CFD trading guide
Leverage trading guide

Is Alibaba stock a good investment?

Pros of investing in Alibaba stock

Traders choose to invest in BABA stocks for a variety of reasons, including:

• News coverage: As a high-profile global company, Alibaba is widely covered by the media. This makes it easier for you to gather information about financial performance and breaking developments to inform your trades.
• Volatility: Price fluctuations aren't always a bad thing. Since Alibaba stock prices are always moving up and down, there are many opportunities for experienced traders who know how to seize the moment.
• Trade both directions: Instead of waiting until the market trends upwards, you can use financial derivatives to capitalise on price movements.
• Leverage: Trading on a margin up to 1:5 lets you get more exposure from small deposits. This amplifies your profit potential, while freeing up your capital to use elsewhere.

Cons of investing in Alibaba stocks

As with any asset, there can be disadvantages to investing in Alibaba shares, such as:

• Volatility: While Alibaba is a huge and well-known company that doesn't mean it's stable. There are many factors that affect its stock price, as discussed above. And while thorough analysis can help protect against risk, there will always be elements that you can't predict.
• Leverage: Trading on a margin can magnify your losses, not just your profits. If you're going to use leverage when trading BABA stocks, make sure you consider your risk appetite and have appropriate risk management tools in place.
• Diversification: Individual stocks are good assets to have in your portfolio. But as with any asset class, they're limited when used on their own. Hedge against risk by including both large- and small-cap stocks, as well as other assets like CFDs on indices and commodities.

How to start trading Alibaba stocks with Tradu

1. Open your Tradu account: Enter a few simple details and you could be trading Alibaba stock in minutes.
2. Create a strategy: Devise your trading plan based on your capital, goals, and risk tolerance.
3. Study the market: Deepen your understanding of BABA stock performance using our live charts and historical data, then discover opportunities using our innovative tools.
4. Execute a trade: Open your first position and then monitor our live Alibaba stock price chart to seize your moment.
5. Leverage our expertise: Take advantage of our insights by contacting our support team or reading our in-depth learning resources.
6. Diversify your portfolio: Expand your portfolio across different markets and asset classes, hedging against risk in any single category.