Why This Buffett Stock Might Be His Most Underrated Pick

Everyone’s eyes are on Apple and Alphabet in Berkshire’s portfolio, but here’s the thing: American Express is quietly Buffett’s second-largest holding—and it’s showing some seriously impressive metrics.

The Numbers Don’t Lie

Berkshire owns 151.6 million AXP shares (worth ~$50B as of Q3), nearly a fifth of its total equity portfolio. Unlike Apple, which Buffett has been slowly trimming, AXP’s stake has stayed rock solid for decades. That’s conviction.

2024 was a monster year:

• Revenue: +9% YoY to $65.9B
• EPS: +25% to $14.01
• $7.9B returned to shareholders (buybacks + dividends)
• Record card spending, fee revenue, and new acquisitions

Momentum hasn’t slowed. Q3 revenue growth accelerated to 11%, with EPS jumping 19%. The Platinum card refresh alone doubled new account acquisitions vs. pre-refresh levels.

Why It Actually Matters

American Express sits on both sides of the transaction—it issues cards, runs the network, AND deals directly with merchants. That gives them an unfair advantage in understanding customer spending patterns and targeting high-value customers.

The $895 annual Platinum fee? Members pay it willingly because they know the value. That’s pricing power.

The Valuation Play

Here’s where AXP stands out: P/E of 24 vs. Apple’s 36 and Alphabet’s 30. Sure, fintech stocks usually trade cheaper, but AXP’s double-digit revenue growth + strong credit performance + shareholder returns justify the multiple.

The risk? A real recession could hammer card spending and push credit losses higher. Competition from banks and BNPL players is also intense.

Still, if you can stomach short-term volatility and think long-term, this might be Buffett’s most underrated bet right now.