Amex & the Algorithm: A Slow Fade?

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American Express took a hit Friday. Shares dropped like a bad tip in a dive bar. No news from the company itself, mind you. Just a tremor of fear running through the market. Artificial intelligence. The usual suspect. The whisper was white-collar jobs were about to become…unoccupied.

The question wasn’t whether the stock was down – it was. Fifteen percent year to date. The question was whether this was a chance to buy, or a warning to walk. A discount, or a prelude to a deeper shade of red?

The Signal from Square

The trouble started with Block, the outfit behind Square and Cash App. They announced layoffs. A big slice of the workforce gone. Jack Dorsey, the man at the top, framed it as…progress. Said AI tools were changing everything.

“Intelligence tools,” he wrote, had rewritten the rules. A smaller team, using these new toys, could do more. And do it better. Sounded like a sales pitch for a future where humans were…optional.

He went further. Said this wasn’t an isolated incident. That most companies would follow suit within a year. A bold claim. And one that spooked the credit and payments crowd. If AI really started peeling layers off the white-collar workforce, the ripples would hit everything. Travel. Spending. Loans. The whole shebang.

Amex, naturally, wouldn’t be immune. No one is. Not in this town.

But the numbers weren’t screaming trouble. Not yet.

The Glossy Surface

American Express just finished a strong year. Revenue up ten percent. A tidy sum. Seventy-two billion dollars, if you’re counting. They weren’t exactly begging for spare change.

Credit trends were holding. Write-offs were low. Two percent. No sign of consumer stress. At least, not on the balance sheet. The numbers told a story. A carefully polished story.

They were also optimistic about the future. Expecting revenue growth of nine to ten percent next year. Earnings per share in the seventeen-dollar range. A comfortable projection. The kind that lulls you into a false sense of security.

The Price of Comfort

After Friday’s tumble, Amex was trading in the low three-hundreds. At the midpoint of their projections, the stock was trading at eighteen times earnings. Not outrageous. But not a steal, either.

It was a reasonable valuation. For a premium brand. With scale. And steady earnings. But the landscape was shifting. And AI introduced a new kind of uncertainty. The kind that makes investors demand a bigger discount. A safety margin.

If the fear of white-collar disruption took hold, that multiple could shrink. Quickly.

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So, time to bail?

I wouldn’t rush for the exits based on a narrative shift alone. Not when Amex is still projecting growth. But I’d treat Friday’s move as a warning shot. For those already holding the stock, I’d lean towards holding, not buying. The increased uncertainty about the job market is a cloud hanging over everything.

The company is performing well. But Dorsey’s letter raised some valid points. Points that investors should be watching. Closely. This isn’t a story with a happy ending guaranteed. Not by a long shot.

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2026-02-27 22:12