We recently published a list of 12 Best Warren Buffett Stock Picks For Beginners. In this article, we are going to take a look at where American Express Company (NYSE:AXP) stands against other best Warren Buffett stocks to invest in.

Warren Buffett, one of the most renowned names in the world of finance, was inspired by two famous economists from the 1930s, Ben Graham and Philip Fisher. From Graham, Buffett learned the idea of a margin of safety, which means he seeks companies whose stocks are trading for less than what their assets are actually worth. He also picked up Graham’s belief that it is pointless to obsess over daily market ups and downs, since real success comes from holding investments for the long term. From Fisher, Buffett developed a strong focus on the quality of a company’s management. He realized that great leadership can make a significant difference in a business’s long-term value. Fisher also warned that over-diversifying could backfire, making it harder to properly monitor each investment. Buffett clearly follows this thinking, since his $267 billion portfolio is concentrated in just 38 stocks as of Q4 2024.

Warren Buffett’s investment strategy is a masterclass in disciplined and fundamentals-driven investing. His focus is on companies with durable competitive advantages, which he refers to as economic moats, combined with strong management and solid capital allocation. The Oracle of Omaha is against chasing trends. Instead, he looks for long-term value and buys only when a company is trading below its intrinsic worth. Buffett’s approach with the iPhone-maker is a great case in point. He was not just impressed by the hardware; he saw the value in its services ecosystem, like the App Store and iCloud, which generate consistent, high-margin revenue.

During the height of the 2008 financial crisis, the Berkshire billionaire shared a remark with investors that remains just as relevant in the current stock market landscape. He wrote:

“Over the long term, the stock market news will be good. In the 20th century, the United States endured two world wars and other traumatic and expensive military conflicts; the Depression; a dozen or so recessions and financial panics; oil shocks; a flu epidemic; and the resignation of a disgraced president. Yet the Dow rose from 66 to 11,497.”

Buffett also emphasizes simplicity and efficiency. Despite his success as a stock picker, he recommends low-cost S&P index funds for most investors, believing they outperform most professionals over time. At its core, Buffett’s strategy is not flashy, and he offers a blueprint for sustainable wealth creation. This article presents the Warren Buffett stock picks that are especially suitable for new investors looking to build a strong portfolio.

A close-up view of a payment terminal, capturing the sophistication of a payment network.

Our Methodology 

For this article, we explored Warren Buffett’s Q4 2024 portfolio, picking 12 stocks with the highest hedge fund sentiment. These stocks are backed by Wall Street hedge funds and the Oracle of Omaha himself. The stocks are ranked in ascending order based on the number of hedge fund holders as per Insider Monkey's Q4 2024. We also included the value of Berkshire Hathaway’s stake in each company for further context.

Why are we interested in the stocks that hedge funds pile into? The reason is simple: our research has shown that we can outperform the market by imitating the top stock picks of the best hedge funds. Our quarterly newsletter’s strategy selects 14 small-cap and large-cap stocks every quarter and has returned 373.4% since May 2014, beating its benchmark by 218 percentage points (see more details here).

American Express Company (NYSE:AXP)

Number of Hedge Fund Holders: 71

Berkshire Hathaway’s Stake Value: $44,996,539,653

American Express Company (NYSE:AXP) is a global payments player with four main segments – U.S. Consumer, Commercial, International Cards, and Global Merchant Services. AXP offers credit and charge cards, banking services, travel perks, loyalty programs, and merchant services.

On April 10, Keefe, Bruyette & Woods maintained an Outperform rating with a $360 price target on American Express Company (NYSE:AXP). Analysts flagged a tough environment with trade tensions hurting travel spend. Despite risks, AXP is seen as resilient, and recent share dips likely reflect softer consumer trends.

American Express Company (NYSE:AXP) completed its acquisition of Center on April 16, a software firm specializing in modern expense management for small and medium-sized businesses. The deal will allow AXP to combine Center’s technology with its corporate and small business card offerings, creating a streamlined, automated platform for managing expenses.

For Q1 2025, AXP raked in $17 billion in revenue, up 8% from last year adjusted for currency changes. Card Member spending kept growing too, up 6%, showing that the company’s premium customer base is holding steady even with all the macro noise. Credit losses dropped slightly to $1.2 billion as American Express Company (NYSE:AXP) released some reserves, and even though loan write-offs stayed at 2.1%, they remained well within the target range. The company is maintaining its full-year forecast of 8-10% revenue growth and earnings per share between $15 and $15.5.

According to Insider Monkey’s Q4 data, 71 hedge funds were bullish on American Express Company (NYSE:AXP), with Warren Buffett’s Berkshire holding a $45 billion stake.

Overall, AXP ranks 11th among the 12 Best Warren Buffett Stock Picks For Beginners. While we acknowledge the potential of AXP as an investment, our conviction lies in the belief that AI stocks hold greater promise for delivering higher returns, and doing so within a shorter time frame. There is an AI stock that went up since the beginning of 2025, while popular AI stocks lost around 25%. If you are looking for an AI stock that is more promising than AXP but that trades at less than 5 times its earnings, check out our report about this cheapest AI stock.

 

READ NEXT: 20 Best AI Stocks To Buy Now and 30 Best Stocks to Buy Now According to Billionaires.

 

Disclosure: None. This article is originally published at Insider Monkey.