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

American Express, Berkshire Hathaway's second-largest public-equity holding at nearly 14% of its portfolio, processed $456 billion of payment volume in Q2, up 9% year over year. Management targets roughly 10% long-term annual revenue growth and mid-teens EPS growth, supported by cashless-payment adoption and affluent younger cardmember acquisition, with millennials and Gen Z comprising 65% of new global accounts. Although AXP has more than doubled over five years, it trades 17% below its December 2025 record and at a 19.5x P/E, which the article views as an attractive entry point.

Analysis

The relevant question is not whether AXP is a quality franchise, but whether its premium valuation can hold as growth normalizes. At roughly 19.5x earnings, AXP trades closer to Visa and Mastercard than to a traditional lender despite retaining materially greater consumer-credit and funding sensitivity. The multiple is defensible only if premium-fee repricing, spend per account, and operating leverage offset rising rewards expense and any deterioration in affluent-consumer credit trends.

Near term, the likely catalyst is evidence that the Platinum refresh is accretive rather than merely producing a one-time account-growth spike. Watch billed-business growth versus marketing and rewards expense over the next one to two earnings reports: sustained high-single-digit volume growth with stable expense-to-revenue leverage would support EPS compounding and a retest of prior highs. Conversely, a deceleration in affluent travel/entertainment spend or rising provision growth would expose the market's tendency to re-rate AXP toward issuer-bank multiples rather than network multiples.

The second-order implication is competitive. AXP's aggressive premium-card value proposition raises rewards and merchant-acquisition costs for JPM, MA and V ecosystem issuers, but MA and V remain cleaner ways to express secular payment digitization because they do not take consumer credit risk. Berkshire ownership is a sentiment and governance anchor, not a near-term earnings catalyst; its concentrated position can also reduce marginal float and amplify downside if a fundamental holder exits.

Contrarian view: the 17% drawdown may reflect concern that premium-card economics are reaching diminishing returns, not a simple valuation opportunity. Fee increases test retention with a lag, while younger cohorts may be high lifetime-value customers only if their spending persists through a weaker labor market. The thesis is falsified by two consecutive quarters of slowing billed-business growth, elevated attrition following fee renewal cycles, or provisions rising faster than revenue.

Key Decisions for Investors

• Initiate a measured long AXP only after the next earnings print confirms stable card-member retention and positive operating leverage; target a 10-15% recovery toward prior highs over 3-6 months, with a stop/reassessment if provisions or net write-offs accelerate materially for two quarters.
• For a cleaner defensive payments exposure, pair long V or MA against short AXP over 6-12 months if macro data weaken: V/MA preserve transaction-volume upside while avoiding AXP's direct credit, funding and rewards-cost exposure. Exit if AXP demonstrates sustained spend growth materially above V/MA without margin erosion.
• Do not add BRK.A solely on the AXP setup. Treat AXP as insufficiently large to change Berkshire's near-term earnings trajectory; use BRK.A only if broader operating-company results, cash deployment, or buyback pace provide an independent catalyst.
• Set an alert around the next two quarterly disclosures for premium-card renewal retention, rewards expense growth, billed-business growth, and reserve build. Absent those data, avoid selling downside volatility: the key risk is an abrupt issuer-style de-rating rather than gradual fundamental erosion.