When one of the world’s most successful investors commits $45 billion to a single stock, the market tends to take notice.
Warren Buffett’s Berkshire Hathaway holds a 22.1% stake in American Express (AXP), valued at $45 billion and ranking as the conglomerate’s second-largest holding behind only Apple. The $203 billion company, also a Dow Jones Industrial Average component, has seen its shares pull back 23% from their 52-week high, pushing its dividend yield to 1.1%. The question now is whether this Buffett-backed financial stock has entered a compelling value zone.
American Express is not a traditional bank. It operates a unique “closed-loop” network, serving as issuer, acquirer, and payment processor all at once—a model that sets it apart from Visa and Mastercard, which rely on partner banks to issue cards.
What truly strengthens its competitive moat is customer quality. CFO Christophe Le Caillec disclosed at a UBS conference that the company’s delinquency rate averaged just 1.37% over the past eight quarters, dipping as low as 1.2% during that period. Amex customers tend to spend more, pay their bills on time, and remain loyal to their cards. In the cyclical lending industry, such a high-quality customer base is a rare asset.
Over the past three decades, American Express has grown its annual dividend from $0.30 per share to $3.28, representing a compound annual growth rate of 8.2%. More notably, while many large banks were forced to cut or suspend dividends during the 2008 financial crisis, Amex maintained its payout. Today, the stock boasts a 36% return on equity—well above the industry average—and retains most of its earnings, providing ample capacity to continue raising dividends and repurchasing shares.
A $45 billion position is not a passive wager; it reflects a conviction born of deep analysis.
The fundamentals support that view. Card fee revenue has grown at a 17% compound annual rate since 2018. Following a recent refresh of its flagship Platinum Card, the company saw new account acquisition shift toward higher-fee products within months, with average fees per new account rising noticeably in the fourth quarter of 2025. Meanwhile, travel bookings through the Amex app jumped 30% year-over-year, and spending at Resy, the dining reservation platform owned by Amex, rose 20%. These figures point not just to customer acquisition, but to deepening engagement.
International expansion adds another layer of growth. Outside the U.S., enrollment among Gen Z and millennial card members grew 20% in the fourth quarter. With just 6% market share across major international markets, Amex still has considerable room to grow before reaching coverage levels comparable to its home market.
Analysts expect adjusted earnings per share to expand from $15.38 in 2025 to $24.30 by 2029. At 16.4 times forward earnings—roughly in line with its 10-year average—the stock would gain approximately 40% over the next three years, including dividend reinvestment. Currently, shares trade at a 28% discount to consensus price targets.
Christophe Le Caillec’s remarks at the UBS conference are worth noting. He projected earnings per share growth of 9% to 10% over the coming year, with share buybacks continuing. The Platinum Card repricing, initiated in January 2026, will take 12 months to fully flow through the income statement, meaning the full financial impact is expected in the fourth quarter of 2026—a near-term catalyst still ahead.
American Express is not a cheap stock. But its current pricing arguably does not fully reflect a business with 36% return on equity, double-digit earnings growth, and near-zero credit losses. For long-term investors, a 23% pullback in a company with this earnings profile—backed by nearly $45 billion in capital from Buffett’s Berkshire Hathaway—makes it at least worth a closer look.
