American Express: Buffett's Favorite Stock
Written by Emily J. Thompson, Senior Investment Analyst
Updated: Jun 25 2026
0mins
Source: Fool
- Significant Earnings Growth: In Q1, American Express reported an 11% increase in fee revenue, a 13% rise in net interest income, and a 15% overall net income growth, demonstrating strong profitability despite a sluggish economic environment marked by rising inflation.
- Superior Credit Quality: The company's net write-off rate fell to 2% in Q1, down from 2.1% in the previous quarter, while the 30-day delinquency rate remained stable at 1.3%, indicating lower credit risk compared to its closed-loop rival Discover, which had a charge-off rate of 5.05%.
- Robust Market Performance: Although American Express stock is down about 8% year-to-date, it has risen approximately 8% over the past month, reflecting positive investor sentiment following strong Q1 results that alleviated concerns about the economy and inflation.
- Long-Term Investment Appeal: Trading at 19 times forward earnings, American Express's stock presents an attractive long-term investment opportunity, especially given its affluent customer base's resilience against economic headwinds, making it a favorable choice in uncertain market conditions.
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Analyst Views on AXP
Wall Street analysts forecast AXP stock price to rise
21 Analyst Rating
8 Buy
12 Hold
1 Sell
Moderate Buy
Current: 351.960
Low
280.00
Averages
379.06
High
425.00
Current: 351.960
Low
280.00
Averages
379.06
High
425.00
About AXP
American Express Company is a globally integrated payments company with card-issuing, merchant-acquiring and card network businesses. It offers products and services to a range of customers, including consumers, small businesses, mid-sized companies and large corporations around the world. Its segments include U.S. Consumer Services (USCS), Commercial Services (CS), International Card Services (ICS) and Global Merchant and Network Services (GMNS). USCS offers travel and lifestyle services as well as banking and non-card financing products. CS offers payment and expense management, banking and non-card financing products. ICS provides services to international customers, including travel and lifestyle services, and manages certain international joint ventures and its loyalty coalition business. GMNS operates a payments network that processes and settles card transactions, acquires merchants and provides multichannel marketing programs and capabilities, services and data analytics.
About the author
Emily J. Thompson
Emily J. Thompson, a Chartered Financial Analyst (CFA) with 12 years in investment research, graduated with honors from the Wharton School. Specializing in industrial and technology stocks, she provides in-depth analysis for Intellectia’s earnings and market brief reports.
American Express: The Preferred Choice for Young Consumers
- Young Consumer Growth: American Express's young customer segment is its fastest-growing cohort, as millennials and Gen Z increasingly prioritize experiential spending, which could lead to long-term wealth accumulation opportunities for the company.
- Earnings Growth Expectations: Analysts project that American Express will achieve annual earnings growth of 13% to 14% over the next three to five years, indicating that the company's strong performance in the premium credit card market will continue to drive shareholder returns.
- Reasonable Valuation: The stock currently trades at less than 20 times 2026 earnings estimates, and with a 1.1% dividend yield, investors can expect an annual total return of approximately 11%, providing a solid foundation for long-term investment.
- Wealth Accumulation Potential: Using the rule of 72, investors could see their investments double in value every six to seven years, which, while not a quick path to wealth, will significantly enhance wealth over 30 to 40 years, especially as credit card spending behavior becomes increasingly central to consumer habits.
See More
Berkshire's Long-Term Investment Strategy Under Buffett and Abel
- Increased Stake in Alphabet: Berkshire Hathaway increased its stake in Alphabet from 17.8 million shares in Q3 2025 to approximately 54 million shares by Q1 2026, reflecting a strong commitment to long-term ownership that is expected to yield sustained compound earnings growth.
- Investment Logic Analysis: Alphabet's diverse business model spans search, video, and cloud computing, reducing reliance on any single revenue stream, thereby enhancing its competitive edge and profitability in the market.
- Shareholder Return Strategy: Alphabet's modest dividend reflects its financial strength and willingness to return capital to shareholders, aligning with Berkshire's long-standing investment preferences and further solidifying its potential as a 'forever stock'.
- Market Position and Future Outlook: With a near-monopoly in online search and investments in emerging fields like AI and autonomous driving, Alphabet is poised to provide Berkshire with long-term growth opportunities, enhancing the stability of its investment portfolio.
See More
Berkshire Increases Stake in Alphabet Stock
- Investment Strategy Shift: Berkshire first disclosed its stake in Alphabet in Q3 2025, increasing its holdings to approximately 54 million shares by Q1 2026, demonstrating a strong commitment to long-term ownership and a focus on acquiring high-quality assets.
- Capital Deployment: Following Alphabet's announcement to raise $80 billion for AI infrastructure, Berkshire agreed to purchase $10 billion in new shares through a private placement, reinforcing its investment position and confidence in Alphabet's growth trajectory.
- Business Diversity: Alphabet's operations span search, video, cloud computing, and more, creating multiple revenue streams that reduce reliance on any single segment, thereby enhancing its competitive edge and profitability.
- Shareholder Returns: Alphabet's modest dividend aligns with Berkshire's investment preferences, showcasing financial strength and a commitment to returning capital to shareholders, further solidifying its appeal as a 'forever stock'.
See More
Three High-Dividend Stocks from Buffett's Portfolio
- Coca-Cola's Stability: Coca-Cola raised its dividend to $0.53 per share in 2026, marking the 64th consecutive year of increases, reflecting the company's commitment to shareholders, while investing $650 million to expand its Fairlife high-protein milk brand to attract health-conscious consumers, thereby enhancing its competitive edge.
- Chevron's High Yield: Chevron increased its dividend to 4.3% in 2026 and completed the acquisition of Hess, gaining a stake in the prized Guyana oil fields, which is expected to provide billions in free cash flow for future dividend increases, although oil price volatility poses risks to its profitability.
- American Express's Rapid Growth: American Express raised its dividend by 16% in 2026 and made its largest investment in refreshing the Platinum Card to attract younger, high-spending customers, despite potential credit defaults during economic downturns, its growth potential remains appealing to investors.
- Benefits of a Diversified Portfolio: These three stocks represent different aspects of stability, yield, and growth, and while each faces unique risks, a diversified investment can mitigate overall risk, making July an opportune time for investment in a quieter market.
See More
Berkshire Hathaway's Financial Powerhouse Status
- Core Insurance Business: Berkshire Hathaway's success is fundamentally rooted in its insurance operations, particularly through collecting premiums and investing the float, which has yielded significant investment returns and enhanced the company's financial stability.
- Cash Reserve Advantage: As of 2026, Berkshire Hathaway boasts nearly $400 billion in cash reserves, providing a cushion during economic downturns or bear markets while enabling new CEO Abel to make contrarian investments during market lows, continuing Buffett's successful strategy.
- Investment Decision Continuity: Although Buffett retired in early 2026, his long-standing investment philosophies and strategies will be upheld by Abel, ensuring consistency and stability in the company's future investment decisions.
- Market Performance Caution: Despite Berkshire Hathaway's esteemed reputation in the investment community, it was notably absent from the latest analyst recommendation list, indicating a cautious market sentiment regarding its future performance, prompting investors to carefully assess its investment value.
See More
Visa Launches New Cybersecurity Platform VTIP
- Cybersecurity Solution: Visa's newly launched Visa Threat Intelligence Platform (VTIP) combines cyber threat intelligence with payment insights to help financial institutions identify cyber risks before they escalate into payment fraud, thereby enhancing fraud prevention and trust in digital payments.
- Attack Defense Capability: The platform aids Visa in blocking nearly 90 million cyberattacks and 11 million phishing emails monthly, offering specialized capabilities such as threat intelligence, vulnerability monitoring, and brand protection, enabling security teams to gain a comprehensive view of emerging risks.
- Growing Market Demand: As financial institutions face increasingly sophisticated cyber threats, the demand for integrated fraud prevention and cybersecurity solutions is expected to rise, allowing Visa to deepen client relationships and create additional revenue opportunities through these services.
- Strengthening Competitive Advantage: The launch of VTIP further solidifies Visa's value-added services portfolio, and as digital commerce and real-time payments expand globally, cybersecurity capabilities like VTIP could become a key competitive advantage, supporting long-term transaction growth and reinforcing Visa's leadership in the digital payments ecosystem.
See More
American Express: The Preferred Choice for Young Consumers
- Young Consumer Growth: American Express's young customer segment is its fastest-growing cohort, as millennials and Gen Z increasingly prioritize experiential spending, which could lead to long-term wealth accumulation opportunities for the company.
- Earnings Growth Expectations: Analysts project that American Express will achieve annual earnings growth of 13% to 14% over the next three to five years, indicating that the company's strong performance in the premium credit card market will continue to drive shareholder returns.
- Reasonable Valuation: The stock currently trades at less than 20 times 2026 earnings estimates, and with a 1.1% dividend yield, investors can expect an annual total return of approximately 11%, providing a solid foundation for long-term investment.
- Wealth Accumulation Potential: Using the rule of 72, investors could see their investments double in value every six to seven years, which, while not a quick path to wealth, will significantly enhance wealth over 30 to 40 years, especially as credit card spending behavior becomes increasingly central to consumer habits.
See More
Berkshire's Long-Term Investment Strategy Under Buffett and Abel
- Increased Stake in Alphabet: Berkshire Hathaway increased its stake in Alphabet from 17.8 million shares in Q3 2025 to approximately 54 million shares by Q1 2026, reflecting a strong commitment to long-term ownership that is expected to yield sustained compound earnings growth.
- Investment Logic Analysis: Alphabet's diverse business model spans search, video, and cloud computing, reducing reliance on any single revenue stream, thereby enhancing its competitive edge and profitability in the market.
- Shareholder Return Strategy: Alphabet's modest dividend reflects its financial strength and willingness to return capital to shareholders, aligning with Berkshire's long-standing investment preferences and further solidifying its potential as a 'forever stock'.
- Market Position and Future Outlook: With a near-monopoly in online search and investments in emerging fields like AI and autonomous driving, Alphabet is poised to provide Berkshire with long-term growth opportunities, enhancing the stability of its investment portfolio.
See More
Berkshire Increases Stake in Alphabet Stock
- Investment Strategy Shift: Berkshire first disclosed its stake in Alphabet in Q3 2025, increasing its holdings to approximately 54 million shares by Q1 2026, demonstrating a strong commitment to long-term ownership and a focus on acquiring high-quality assets.
- Capital Deployment: Following Alphabet's announcement to raise $80 billion for AI infrastructure, Berkshire agreed to purchase $10 billion in new shares through a private placement, reinforcing its investment position and confidence in Alphabet's growth trajectory.
- Business Diversity: Alphabet's operations span search, video, cloud computing, and more, creating multiple revenue streams that reduce reliance on any single segment, thereby enhancing its competitive edge and profitability.
- Shareholder Returns: Alphabet's modest dividend aligns with Berkshire's investment preferences, showcasing financial strength and a commitment to returning capital to shareholders, further solidifying its appeal as a 'forever stock'.
See More
Three High-Dividend Stocks from Buffett's Portfolio
- Coca-Cola's Stability: Coca-Cola raised its dividend to $0.53 per share in 2026, marking the 64th consecutive year of increases, reflecting the company's commitment to shareholders, while investing $650 million to expand its Fairlife high-protein milk brand to attract health-conscious consumers, thereby enhancing its competitive edge.
- Chevron's High Yield: Chevron increased its dividend to 4.3% in 2026 and completed the acquisition of Hess, gaining a stake in the prized Guyana oil fields, which is expected to provide billions in free cash flow for future dividend increases, although oil price volatility poses risks to its profitability.
- American Express's Rapid Growth: American Express raised its dividend by 16% in 2026 and made its largest investment in refreshing the Platinum Card to attract younger, high-spending customers, despite potential credit defaults during economic downturns, its growth potential remains appealing to investors.
- Benefits of a Diversified Portfolio: These three stocks represent different aspects of stability, yield, and growth, and while each faces unique risks, a diversified investment can mitigate overall risk, making July an opportune time for investment in a quieter market.
See More
Berkshire Hathaway's Financial Powerhouse Status
- Core Insurance Business: Berkshire Hathaway's success is fundamentally rooted in its insurance operations, particularly through collecting premiums and investing the float, which has yielded significant investment returns and enhanced the company's financial stability.
- Cash Reserve Advantage: As of 2026, Berkshire Hathaway boasts nearly $400 billion in cash reserves, providing a cushion during economic downturns or bear markets while enabling new CEO Abel to make contrarian investments during market lows, continuing Buffett's successful strategy.
- Investment Decision Continuity: Although Buffett retired in early 2026, his long-standing investment philosophies and strategies will be upheld by Abel, ensuring consistency and stability in the company's future investment decisions.
- Market Performance Caution: Despite Berkshire Hathaway's esteemed reputation in the investment community, it was notably absent from the latest analyst recommendation list, indicating a cautious market sentiment regarding its future performance, prompting investors to carefully assess its investment value.
See More
Visa Launches New Cybersecurity Platform VTIP
- Cybersecurity Solution: Visa's newly launched Visa Threat Intelligence Platform (VTIP) combines cyber threat intelligence with payment insights to help financial institutions identify cyber risks before they escalate into payment fraud, thereby enhancing fraud prevention and trust in digital payments.
- Attack Defense Capability: The platform aids Visa in blocking nearly 90 million cyberattacks and 11 million phishing emails monthly, offering specialized capabilities such as threat intelligence, vulnerability monitoring, and brand protection, enabling security teams to gain a comprehensive view of emerging risks.
- Growing Market Demand: As financial institutions face increasingly sophisticated cyber threats, the demand for integrated fraud prevention and cybersecurity solutions is expected to rise, allowing Visa to deepen client relationships and create additional revenue opportunities through these services.
- Strengthening Competitive Advantage: The launch of VTIP further solidifies Visa's value-added services portfolio, and as digital commerce and real-time payments expand globally, cybersecurity capabilities like VTIP could become a key competitive advantage, supporting long-term transaction growth and reinforcing Visa's leadership in the digital payments ecosystem.
See More
