The IT student is also suspected of trying to contact a bombmaker to build a nail bomb, and researching an Elton John concert in Hyde Park which took place on Sunday to mark the anniversary of the September 11 attacks.
He is charged with planning to carry out an attack at a central London landmark, potentially Buckingham Palace or Oxford Street.
It is understood evidence against Ali-Syed was gathered in a joint operation between MI5 and Scotland Yard.
An undercover officer, posing as an extremist, infiltrated his circle and allegedly recorded exchanges of him preparing a terrorist attack.
Ali-Syed is accused of attempting to get hold of an improvised pressure cooker bomb built to instructions published online by Al Qaeda.
Yesterday, he appeared at Westminster Magistrates` Court charged with preparing an act of terrorism between April 12 and September 9.
Prosecutor Thomas Halpin said Ali-Syed tried to contact someone online `to make an incendiary explosive device,` asking an intermediary: `How many people this one bomb can kill or injure?`
He added: `His internet searches show he is searching busy places in London. Oxford Street, upcoming events in London. He is looking at internet searches. Where are soldiers in the UK, London`s top ten most crowded boroughs, Buckingham Palace, Royal Marines Reserve, City of London.`
District Judge Elizabeth Roscoe remanded Ali-Syed in custody and ordered him to appear at the Old Bailey next Monday.
Ali-Syed is one of three men arrested during dawn raids and searches by unarmed officers in London and the Home Counties last Thursday. No weapons or bomb-making materials were recovered in the operation.
A second man, aged 20, was also held in west London on suspicion of preparing a terrorist act and failing to disclose information regarding an act of terrorism.
A third man, aged 19, who is originally from Mosul, Iraq, was arrested on suspicion of a religiously aggravated offence.
Both men were released on bail. Just three months ago, Met Police Commissioner Sir Bernard Hogan-Howe warned it is a case of `when, not if`, the UK will be hit by Islamic State-inspired terrorists.
The force is arresting a terrorist suspect every day and recently unveiled elite teams of motorcycle gun cops whose job is to foil a marauding attack.
Born in Ealing, west London, Ali-Syed is one of three brothers. His family has links to Slough, High Wycombe, Southall and Hounslow.
The family is originally from Pakistan, where his father still has interests in `land and property`.
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