Warren Buffett’s Berkshire Hathaway (NYSE: BRKA)(NYSE: BRKB) manages a massive $354 billion portfolio, but its long-held American Express (NYSE: AXP) position remains one of its most significant.
Berkshire has owned American Express since the 1990s, and as of March 31, it held almost 152 million shares representing a 22.5% stake in the credit card giant.
That investment has delivered impressive results, with American Express generating a total return of 119% over the past five years as of August 6.
During his tenure as CEO of Berkshire Hathaway, Warren Buffett oversaw capital allocation decisions that resulted in the conglomerate’s stock compounding at a 19.7% annualized pace.
Buffett’s philosophy centers on identifying great businesses and allowing them to compound over long periods, making his endorsements a powerful signal for individual investors.
When a company passes Buffett’s rigorous investment screen, it typically means the business possesses a wide economic moat and deserves serious attention from the broader market.
American Express has built an incredibly strong brand through its premium positioning targeting affluent customers, which boosts spending activity while supporting industry-leading charge-off rates.
The company also benefits from a classic network effect, where growing card membership attracts more merchants, and expanding merchant acceptance in turn draws more cardholders to the platform.
On the financial front, American Express reported net revenue of $19.6 billion in the second quarter, up 10% year over year, with payment volume growing at its fastest pace in three years.
That growth was driven by the spending behavior of millennial and Generation Z consumers, two demographic groups that have become increasingly central to the company’s long-term strategy.
Diluted earnings per share increased 11% compared to Q2 2025, demonstrating that profitability is keeping pace with the company’s top-line momentum.
Management expects earnings per share to grow at a mid-teens annualized rate over the long run, pointing to sustained confidence in the business model’s durability.
The stock currently trades at a forward price-to-earnings ratio of 19.9, a valuation that is not expensive but also not a bargain for investors looking for a discounted entry point.
Despite the valuation consideration, Berkshire Hathaway’s meaningful and long-standing position in American Express should encourage individual investors to take a much closer look at the stock.
