Berkshire's 17% American Express Bet: A Signal for Investors-or Just a Old Habit?

Berkshire held American Express steady, so the story is about persistence rather than a new build

The first thing to get right is simple: Berkshire did not add to American Express. The 13F shows Berkshire still held 151,610,700 shares with no change during the quarter, and the position was worth about $45.6 billion on the latest reporting. The older talk of a 'more than 20% ownership stake' was not the result of fresh Berkshire buying; it came from American Express's buybacks reducing shares outstanding.

Why an unchanged stake still matters

What matters now is not a new AXP purchase, but what the holding says about Berkshire's broader posture. The company is still more concentrated after trimming other positions, and American Express remains 17.43% in American Express of the disclosed portfolio. That does not mean Buffett is signaling an immediate addition to the position. It does suggest that Berkshire still has confidence in the business while keeping its equity slate more focused than it was a year ago.

For individual investors, the useful takeaway is narrower: this looks more like continued endorsement of business quality than proof that Berkshire is actively rebuilding American Express.

American Express still looks like a premium spending franchise, not a tired lender

Berkshire kept the stake because Amex is still posting solid activity from a relatively affluent customer base. In the latest quarter, Amex saw billed business rise 9% to $455.8 billion and revenue rise 10% to $19.6 billion. Reuters also noted that higher-income consumers remained central to the company's performance and were generally better positioned to keep spending on travel and dining.

The operating trend has held up across both quarters

The first quarter pointed the same way. Amex reported card member spend growth accelerated to 10%, revenue up 11% or 10% FX-adjusted, and EPS of $4.28, up 18%. Management also reaffirmed its full-year revenue and EPS guidance. In Q2, the pattern continued, with revenues net of interest expense climbed 10% to $19.6 billion, billed business up 9% to $455.8 billion, and EPS reaching $4.53.

Amex and Mastercard are growing premium demand in different ways

A side-by-side look at Mastercard and American Express helps show the difference in business models. One analyst comparison highlighted Mastercard purchase volume +9% alongside Amex's $428 billion of card member spend growth in Q1. The broad industry overlap is real, but the playbooks are different.

Mastercard is primarily a network monetizing volume across many issuers. Amex combines a payment network with its own card portfolio and a stronger focus on a premium customer base. That is why Amex's spend growth matters: it is tied to the health of higher-end consumer demand, not just raw card adoption.

Credit risk is not the main headline yet

Bears will argue that Amex is still a lender, so consumer stress should eventually show up in the books. For now, though, the credit picture looks stable. In Q2, provisions for credit losses were $1.1 billion, down from $1.4 billion a year earlier, and The net write-off rate held at 2.0%, flat year-over-year.

There is still a nuance worth watching. Amex raised its full-year revenue outlook to 10% growth but kept EPS guidance at $17.30 to $17.90. Management tied that to increased investments in new customer acquisition and technology development. In practical terms, some of the extra revenue may be reinvested rather than flowing immediately into near-term earnings.

What this means for individual investors

Berkshire's unchanged 151,610,700-share AXP position is best read as a sign that American Express is still viewed as a high-quality business. It is not a signal to buy at any price.

The more practical question is valuation and fit. American Express still trades at about 20.68x earnings and offers a 1.04% yield, which is richer than Berkshire's broader conglomerate profile at roughly 15.48x earnings. So the Berkshire signal may be more useful as a watchlist cue than as a reason to pay up blindly.

What to watch instead of the headline

If you are following AXP for your own portfolio, focus on a short list of proof points:

• Customer strength: whether billed business and premium-card demand stay healthy.
• Margins vs. investment: whether higher spending on acquisition and technology is lifting future growth rather than simply delaying earnings leverage.
• Credit discipline: whether loss provisions and net write-off rates remain stable.
• Berkshire behavior: whether the stake stays large and concentrated as cash is redeployed elsewhere.

When the bullish read weakens

A Berkshire stake lowers the emotional temperature a bit, but it does not eliminate risk. Step back from the more positive view if:

• affluent spending begins to slow materially,
• revenue growth rises but EPS leverage fails to improve,
• credit costs start climbing instead of staying contained, or
• Berkshire's portfolio moves away from concentration and toward broader diversification.