Why American Express Stock Flew Higher on Friday

American Express (NYSE: AXP) stock rallied in late-session action on Friday to close the day higher in price. While there was no direct news sending the share price up, general optimism on stocks and the economy helped lift Amex into positive territory. It did better on the day than the S&P 500 index, which essentially traded sideways.

An emerging rival?

Credit card companies were a bit in the spotlight that day, thanks to an article in The Wall Street Journal about Amex's rival, ambitious financial services company Capital One Financial.

Image source: Getty Images.

In the piece, the financial newspaper of record detailed Capital One's work in establishing itself as a company that now owns and operates a proprietary network (thanks to the recent closing of its Discover Financial Services acquisition).

This makes it a peer of Amex, which, as the premier "closed loop" card company, is the well-established leader in the segment -- "open-loop" companies, namely Mastercard and Visa, only process the transactions on their branded cards and do not operate as issuers like Amex.

The Journal wrote that Capital One has assertively pushed into the high-spender segment that has been so well serviced by Amex. The upstart also offers a range of perks to its cardholders, making its credit products more "sticky" and intensifying the competition to woo affluent users.

There's nothing like cachet

Amex's share price uptick on Friday indicates that, at least to some degree, the market isn't overly worried about Capital One lapping the incumbent anytime soon. One of the great advantages Amex has is cachet -- it's the credit card for wealthy individuals who don't mind spending their scratch lavishly.

This is tough for a competitor to overtake, no matter how many perks and prizes it offers. So, I don't think AmEx's business is at serious risk from Capital One, at least not yet.

Should you invest $1,000 in American Express right now?

Before you buy stock in American Express, consider this:

The Motley Fool Stock Advisor analyst team just identified what they believe are the 10 best stocks for investors to buy now… and American Express wasn’t one of them. The 10 stocks that made the cut could produce monster returns in the coming years.

Consider when Netflix made this list on December 17, 2004... if you invested $1,000 at the time of our recommendation, you’d have $704,676!* Or when Nvidia made this list on April 15, 2005... if you invested $1,000 at the time of our recommendation, you’d have $950,198!*

Now, it’s worth noting Stock Advisor’s total average return is 1,048% — a market-crushing outperformance compared to 175% for the S&P 500. Don’t miss out on the latest top 10 list, available when you join Stock Advisor.

See the 10 stocks »

*Stock Advisor returns as of June 23, 2025

American Express is an advertising partner of Motley Fool Money. Eric Volkman has no position in any of the stocks mentioned. The Motley Fool has positions in and recommends Mastercard and Visa. The Motley Fool recommends Capital One Financial. The Motley Fool has a disclosure policy.