Berkshire Hathaway Has Nearly 14% of Its $359 Billion Portfolio Invested in This Winning Stock That's Doubled in 5 Years

American Express processed $456 billion of payment volume in Q2, up 9% year over year, while 65% of new global accounts came from millennial and Gen Z customers. Management targets roughly 10% long-term annual revenue growth and mid-teens EPS growth, supported by cashless-payment adoption, premium-card pricing power, and lower credit risk among affluent cardholders. Berkshire Hathaway owns a 22.5% stake, representing nearly 14% of its public-equity portfolio, while AXP trades at 19.5x earnings and 17% below its December 2025 record high.

Analysis

This is unlikely to create a durable near-term catalyst: the thesis rests largely on management’s long-range algorithm and a multiple that is not obviously discounted versus the quality-card cohort. At roughly 19.5x earnings, AXP is priced for continued premium-spend resilience; unlike V and MA, its closed-loop model carries direct consumer-credit and funding exposure. The relevant variable for the next 1-3 months is not card-volume growth but whether affluent discretionary categories—travel, restaurants and premium retail—continue to outpace total consumption without a rise in delinquency or reserve building.

The underappreciated positive is operating leverage from premium-card repricing and younger-account maturation: if retention remains stable after fee increases, net card fees can compound faster than billed business and reduce dependence on transaction yields. Conversely, elevated acquisition and rewards expense may offset this benefit; a fast-growing premium portfolio is not automatically margin accretive if benefit costs and marketing remain bid up. This makes quarterly revenue growth alone a poor read-through—watch expense growth, card-member retention, net interest income, and provision trends.

Competitive dynamics favor V and MA in a consumer slowdown because they retain payment-volume exposure while avoiding AXP’s credit losses and bank funding sensitivity. AXP can outperform only if its premium customer mix sustains spend while merchant discount-rate economics and fee pricing remain intact. Berkshire ownership is a sentiment anchor rather than a near-term valuation catalyst; any further BRK portfolio activity would matter more as a technical overhang than as a change in AXP fundamentals.

Contrarian view: the 17% drawdown may reflect a rational compression of the market’s willingness to pay for a hybrid network/lender, not a clean entry point. AXP needs evidence that earnings growth is driven by durable fee and spend economics rather than buybacks, while a weaker labor market or travel slowdown would expose the credit leg within one to two reporting periods.

Key Decisions for Investors

• No immediate directional trade on the article alone; establish an alert ahead of the next AXP earnings release for premium-card retention, rewards/marketing expense growth, reserve build, and management’s 2026 spending outlook.
• For a 3-6 month defensive payments expression, consider long V or MA versus short AXP in equal dollar beta-adjusted sizing if US consumer-credit delinquencies or unemployment trend higher. The pair captures AXP’s incremental credit/funding sensitivity; exit if AXP’s provisions remain flat and billed-business growth exceeds V/MA volume growth by more than 3 percentage points for two quarters.
• For constructive exposure, wait for confirmation that net card fees and pre-provision margin expand while credit metrics remain stable; then buy AXP on a post-earnings pullback rather than chase valuation expansion. A 12-month upside case requires sustained mid-teens EPS growth; thesis fails on a material reserve build, a guidance cut, or premium-card retention deterioration following repricing.
• Do not treat BRK.A ownership as a standalone catalyst. Monitor Berkshire filings only for position changes: a meaningful reduction could create a technical selling window in AXP, while unchanged ownership is fundamentally neutral.