Buffett's Departure and Berkshire's Investment Strategy
Written by Emily J. Thompson, Senior Investment Analyst
Updated: 3 days ago
0mins
Should l Buy AXP?
Source: Fool
- Strong Performance of American Express: American Express, the second-largest holding in Berkshire Hathaway's portfolio at 16.7%, saw card fees increase by 17% year-over-year in Q4 2025, alongside a 10% rise in total sales, demonstrating resilience and growth potential even in tough economic conditions.
- Growth Among Younger Customers: In Q4 2025, millennials and Gen Z accounted for 65% of new global consumer cards, indicating a promising outlook for the company over the next several decades, particularly in attracting younger consumers.
- Diverse Business of Alphabet: As the world's largest search engine, Google leveraged its advertising dominance, with total revenue up 15% and cloud revenue increasing by 48% year-over-year in Q4 2025, showcasing its strong market competitiveness.
- Strategic Importance of AI Investment: Alphabet invested $91 billion in capital expenditures in 2025 and plans to invest $185 billion in AI development, which, despite market concerns, will keep the company competitive in the AI race and open up numerous opportunities.
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Analyst Views on AXP
Wall Street analysts forecast AXP stock price to rise
21 Analyst Rating
7 Buy
13 Hold
1 Sell
Moderate Buy
Current: 342.880
Low
280.00
Averages
373.63
High
425.00
Current: 342.880
Low
280.00
Averages
373.63
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 Market Performance and Outlook
- Share Buyback Strategy: American Express's ongoing stock buybacks have gradually increased Berkshire Hathaway's stake to 22.1%, which not only enhances its ownership in the company but also reflects confidence in future growth prospects.
- Revenue and Profit Growth: Over the past decade, American Express has seen a 120% revenue increase and a 205% rise in diluted earnings per share, demonstrating strong performance amid economic expansion, with expectations to achieve long-term growth targets of 10% and mid-teens, respectively.
- Premium Market Positioning: With luxury credit card offerings and an annual fee increase of 75%, American Express successfully attracts high-spending customers, and this pricing power contributes to sustainable financial success for the company.
- Industry Leadership: Despite a current price-to-earnings ratio of 23.3, which has expanded by 124% over the past decade, American Express continues to show strong market competitiveness driven by the rising penetration of cashless transactions, attracting cautious investor interest.
See More
American Express Stock Shows Strong Performance
- Significant Stock Growth: As of February 9, American Express's stock price has risen 180% over the past five years, with total returns including dividends reaching 198%, highlighting its strong performance in the investment portfolio and attracting investor interest.
- Increased Berkshire Holdings: Berkshire Hathaway currently owns 22.1% of American Express, with this stake gradually increasing to 16.5% of its portfolio due to the company's ongoing stock buybacks, enhancing Berkshire's control and potential returns from this investment.
- Brand Value and Pricing Power: American Express leverages its strong brand and premium credit card offerings to raise average annual fees by 75% from 2020 to 2025, reflecting its pricing power and providing a stable revenue stream for the company.
- Sustained Growth Potential: Over the past decade, American Express's revenue has climbed 120%, with diluted earnings per share increasing by 205%, as the leadership team aims for long-term growth targets of 10% and mid-teens, indicating a favorable outlook amid economic expansion.
See More
Three Key Stocks in Buffett's Portfolio
- American Express Earnings Analysis: American Express reported Q4 earnings of $3.53 per share, falling short of expectations and causing a more than 10% drop from its early January peak; however, its total revenue still grew 9% year-over-year, indicating resilience in its affluent customer base, with projected earnings per share of $17.30 to $17.90 in 2026, reflecting the company's optimistic outlook.
- Apple Sales Growth: Apple's fiscal Q1 iPhone sales surged 23% year-over-year to $85.3 billion, despite a slight stock decline due to market focus on AI; consumer anticipation for future AI tools is driving sales, showcasing the company's strong performance in the tech sector.
- Constellation Brands Challenges: Constellation Brands, a smaller position in Buffett's portfolio, has grown to a $2 billion stake since its initial purchase in late 2024, facing declining beer sales over the past four quarters; however, a recovering economy is expected to drive growth, with a current dividend yield of 2.5%.
- Market Sentiment Impact: Despite the stock price declines of American Express and Apple due to market pessimism, their fundamentals remain strong, suggesting that investors should focus on long-term potential rather than short-term fluctuations.
See More
American Express Performs Strongly While Apple Faces Challenges
- American Express Earnings Highlights: Despite fourth-quarter earnings of $3.53 per share falling short of expectations, leading to a more than 10% drop from early January highs, the company's total revenue still grew 9% year-over-year, showcasing the resilience of its affluent cardholder base and an expected recovery in growth.
- Apple Sales Rebound: Apple's fiscal first-quarter iPhone sales surged 23% year-over-year to $85.3 billion, driven by consumer anticipation for future AI tools, despite concerns surrounding its technology sector, indicating strong market demand.
- Brewer Investment Opportunity: Berkshire Hathaway's investment in Constellation Brands began in late 2024 and grew to a $2 billion stake by mid-2025; although the company faces declining interest in alcoholic beverages, a recovery in the economy is expected to boost its business.
- Market Sentiment Impact: The stock price fluctuations of American Express and Apple reflect broader market pessimism, with analysts suggesting that this dynamic could reverse as investors reassess the companies' fundamentals, presenting potential investment opportunities.
See More
Credit Card Companies Face Bipartisan Pressure
- Political Pressure Intensifies: Amid persistent inflation, Trump and Sanders have found common ground in seeking to lower credit card annual percentage rates, with Trump proposing a 10% cap and Sanders advocating for a permanent 15% cap, potentially reshaping the profitability of credit card companies.
- Cautious Industry Response: Major credit card issuers like Capital One are in a holding pattern amidst political rhetoric, fearing that if a cap is implemented, they will be compelled to cut credit lines, adversely affecting credit access for lower-income households.
- Profitability at Risk: Analysts predict that a long-term rate cap could reduce Capital One's earnings per share by 25% or wipe them out entirely, as credit card operations account for approximately 74% of its total revenue, primarily derived from interest on customer balances.
- Acquisition Impact Significant: Capital One's $35 billion acquisition of Discover last year will be affected by any interest rate limits, as Discover's credit card balances will also be impacted, further diminishing Capital One's competitive edge, especially without a robust payment network.
See More
Berkshire Likely Sold Additional Shares of Apple and Bank of America in Q4
Berkshire Hathaway's Filing: The company is set to release its fourth-quarter equity holdings, which will be closely examined by investors and analysts.
Warren Buffett's Leadership: This filing is particularly significant as it marks Warren Buffett's final quarter leading Berkshire Hathaway, raising interest in any strategic moves made by him and his team.
See More
American Express Market Performance and Outlook
- Share Buyback Strategy: American Express's ongoing stock buybacks have gradually increased Berkshire Hathaway's stake to 22.1%, which not only enhances its ownership in the company but also reflects confidence in future growth prospects.
- Revenue and Profit Growth: Over the past decade, American Express has seen a 120% revenue increase and a 205% rise in diluted earnings per share, demonstrating strong performance amid economic expansion, with expectations to achieve long-term growth targets of 10% and mid-teens, respectively.
- Premium Market Positioning: With luxury credit card offerings and an annual fee increase of 75%, American Express successfully attracts high-spending customers, and this pricing power contributes to sustainable financial success for the company.
- Industry Leadership: Despite a current price-to-earnings ratio of 23.3, which has expanded by 124% over the past decade, American Express continues to show strong market competitiveness driven by the rising penetration of cashless transactions, attracting cautious investor interest.
See More
American Express Stock Shows Strong Performance
- Significant Stock Growth: As of February 9, American Express's stock price has risen 180% over the past five years, with total returns including dividends reaching 198%, highlighting its strong performance in the investment portfolio and attracting investor interest.
- Increased Berkshire Holdings: Berkshire Hathaway currently owns 22.1% of American Express, with this stake gradually increasing to 16.5% of its portfolio due to the company's ongoing stock buybacks, enhancing Berkshire's control and potential returns from this investment.
- Brand Value and Pricing Power: American Express leverages its strong brand and premium credit card offerings to raise average annual fees by 75% from 2020 to 2025, reflecting its pricing power and providing a stable revenue stream for the company.
- Sustained Growth Potential: Over the past decade, American Express's revenue has climbed 120%, with diluted earnings per share increasing by 205%, as the leadership team aims for long-term growth targets of 10% and mid-teens, indicating a favorable outlook amid economic expansion.
See More
Three Key Stocks in Buffett's Portfolio
- American Express Earnings Analysis: American Express reported Q4 earnings of $3.53 per share, falling short of expectations and causing a more than 10% drop from its early January peak; however, its total revenue still grew 9% year-over-year, indicating resilience in its affluent customer base, with projected earnings per share of $17.30 to $17.90 in 2026, reflecting the company's optimistic outlook.
- Apple Sales Growth: Apple's fiscal Q1 iPhone sales surged 23% year-over-year to $85.3 billion, despite a slight stock decline due to market focus on AI; consumer anticipation for future AI tools is driving sales, showcasing the company's strong performance in the tech sector.
- Constellation Brands Challenges: Constellation Brands, a smaller position in Buffett's portfolio, has grown to a $2 billion stake since its initial purchase in late 2024, facing declining beer sales over the past four quarters; however, a recovering economy is expected to drive growth, with a current dividend yield of 2.5%.
- Market Sentiment Impact: Despite the stock price declines of American Express and Apple due to market pessimism, their fundamentals remain strong, suggesting that investors should focus on long-term potential rather than short-term fluctuations.
See More
American Express Performs Strongly While Apple Faces Challenges
- American Express Earnings Highlights: Despite fourth-quarter earnings of $3.53 per share falling short of expectations, leading to a more than 10% drop from early January highs, the company's total revenue still grew 9% year-over-year, showcasing the resilience of its affluent cardholder base and an expected recovery in growth.
- Apple Sales Rebound: Apple's fiscal first-quarter iPhone sales surged 23% year-over-year to $85.3 billion, driven by consumer anticipation for future AI tools, despite concerns surrounding its technology sector, indicating strong market demand.
- Brewer Investment Opportunity: Berkshire Hathaway's investment in Constellation Brands began in late 2024 and grew to a $2 billion stake by mid-2025; although the company faces declining interest in alcoholic beverages, a recovery in the economy is expected to boost its business.
- Market Sentiment Impact: The stock price fluctuations of American Express and Apple reflect broader market pessimism, with analysts suggesting that this dynamic could reverse as investors reassess the companies' fundamentals, presenting potential investment opportunities.
See More
Credit Card Companies Face Bipartisan Pressure
- Political Pressure Intensifies: Amid persistent inflation, Trump and Sanders have found common ground in seeking to lower credit card annual percentage rates, with Trump proposing a 10% cap and Sanders advocating for a permanent 15% cap, potentially reshaping the profitability of credit card companies.
- Cautious Industry Response: Major credit card issuers like Capital One are in a holding pattern amidst political rhetoric, fearing that if a cap is implemented, they will be compelled to cut credit lines, adversely affecting credit access for lower-income households.
- Profitability at Risk: Analysts predict that a long-term rate cap could reduce Capital One's earnings per share by 25% or wipe them out entirely, as credit card operations account for approximately 74% of its total revenue, primarily derived from interest on customer balances.
- Acquisition Impact Significant: Capital One's $35 billion acquisition of Discover last year will be affected by any interest rate limits, as Discover's credit card balances will also be impacted, further diminishing Capital One's competitive edge, especially without a robust payment network.
See More
Berkshire Likely Sold Additional Shares of Apple and Bank of America in Q4
Berkshire Hathaway's Filing: The company is set to release its fourth-quarter equity holdings, which will be closely examined by investors and analysts.
Warren Buffett's Leadership: This filing is particularly significant as it marks Warren Buffett's final quarter leading Berkshire Hathaway, raising interest in any strategic moves made by him and his team.
See More
