Why Is Gen Z Emerging as AmEx's Next Premium Growth Driver?

American Express Company AXP, popularly known as AmEx, is uncovering a powerful growth opportunity with younger consumers, especially Gen Z and Millennials. These groups, who were once viewed as doubtful about traditional credit, are now becoming one of the fastest-growing adopters of AXP’s premium, digital-first products. They often choose fashion and brands that enhance their personal style, and AXP is positioning itself in that same premium, image-driven space.

Millennials and Gen Z are driven by lifestyle choices more than any previous generation. AmEx’s network of airport lounges, dining rewards, travel benefits and exclusive-event access aligns with a generation that prioritizes experiences over material things. For them, having a premium card isn’t just about making payments — it’s about unlocking a whole new level of lifestyle.

Digital onboarding has transformed the experience. AmEx has streamlined its application processes, enhanced the app experiences and embraced partnerships with creators, giving the brand an aspirational vibe instead of an elitist one. Moreover, consumers’ spending habits are increasingly focused on wellness and subscription areas, where Amex truly excels with its rewards. With a closed-loop network, AmEx can craft more personalized offers that resonate with experience-seeking consumers.

In the third quarter of 2025, U.S. Consumer Services billed business rose 9% year over year, supported by strong Millennial and Gen Z spending. If this trend continues, Gen Z and Millennials might transform from a future customer base into AmEx’s most powerful real-time growth engine.

How Are Competitors Faring?

Some of AXP’s competitors, which enhanced benefits to improve experience, include Mastercard Incorporated MA and Visa Inc. V.

Mastercard is also expanding its appeal to younger consumers by forming strong partnerships in travel, offering digital identity tools and providing exciting rewards. By focusing on smooth payment experiences, enhanced card perks and collaborations that resonate with lifestyles, Mastercard is keeping itself relevant for consumers seeking convenience and unique experiences.

Visa is enhancing its engagement with younger consumers by teaming up with creators, rolling out payment innovations and travel-friendly features. By focusing on digital security, worldwide acceptance and seamless online experiences, V is catering to the spending habits of younger consumers who prioritize speed, flexibility and discovery.

American Express’ Price Performance, Valuation & Estimates

Shares of AXP have risen 22.7% in the year-to-date period against the industry’s decline of 7.1%.

From a valuation standpoint, American Express trades at a forward price-to-earnings ratio of 20.98X, down from the industry average of 23.88X. AXP carries a Value Score of C.

The Zacks Consensus Estimate for American Express’ 2025 earnings is pegged at $15.43 per share, implying a 15.6% jump from the year-ago period.

AXP currently carries a Zacks Rank #3 (Hold). You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.

Want the latest recommendations from Zacks Investment Research? Today, you can download 7 Best Stocks for the Next 30 Days. Click to get this free report

This article originally published on Zacks Investment Research (zacks.com).

Zacks Investment Research