American Express Company (AXP): A Bull Case Theory

We came across a bullish thesis on American Express Company on Rigatoni Capital’s Substack. In this article, we will summarize the bulls’ thesis on AXP. American Express Company's share was trading at $360.31 as of December 1st. AXP’s trailing and forward P/E were 24.20 and 20.53 respectively according to Yahoo Finance.

American Express (AXP) remains one of the most enduring wealth compounders, rooted in a business model that caters to the affluent consumer segment driving nearly half of U.S. spending. The company’s strategy has increasingly focused on high-income customers, exemplified by raising its Platinum Card fee to $895 while expanding premium perks and experiences. This positioning aligns with broader investment themes around recurring revenue, affluent consumer behavior, and the long-term growth in travel and leisure.

Even amid cyclical slowdowns in discretionary spending, AmEx’s ability to retain and expand its elite customer base has made it resilient. Over the past decade, the company has rewarded shareholders through consistent buybacks, dividend increases, and disciplined reinvestment of free cash flow. Its Q2 2025 results reaffirmed this strength, with record revenue of $17.9 billion, EPS growth of 17%, and 3.1 million new cards acquired—driven largely by Millennials and Gen Z. International expansion continues to provide a significant runway, supported by strong capital ratios and low delinquency rates.

AmEx’s reaffirmed 2025 guidance projects 8–10% revenue growth and mid-teens EPS expansion, underpinned by its premium focus and new card refreshes. As the $15 trillion travel economy takes shape by 2040, AmEx stands to benefit from global consumers prioritizing experiences over possessions. With nearly 19% of Berkshire Hathaway’s portfolio still in AmEx, Warren Buffett’s long-standing conviction underscores its quality. For investors seeking exposure to durable, experience-driven spending, AmEx remains a cornerstone compounder positioned for continued long-term wealth creation.

Previously we covered a bullish thesis on American Express Company (AXP) by Max Dividends and Serhio MaxDividends in May 2025, which highlighted its premium customer base, dividend growth, and strong buybacks. The stock has appreciated about 21.65% since our coverage as these drivers played out. The thesis still stands, while Rigatoni Capital shares a similar view emphasizing affluent consumer spending and travel growth.

American Express Company is not on our list of the 30 Most Popular Stocks Among Hedge Funds. As per our database, 70 hedge fund portfolios held AXP at the end of the second quarter which was 75 in the previous quarter. While we acknowledge the potential of AXP as an investment, we believe certain AI stocks offer greater upside potential and carry less downside risk. If you're looking for an extremely undervalued AI stock that also stands to benefit significantly from Trump-era tariffs and the onshoring trend, see our free report on the best short-term AI stock.

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Disclosure: None.