The recent performance of American Express (AXP 0.64%) has drawn considerable attention. Over the past five years, the company’s shares have yielded a total return of 124% as of March 10th. However, a decline of 18% in share price this year suggests a shift in sentiment. The prevailing anxieties regarding the impact of artificial intelligence on employment and consumer spending are, predictably, being factored into valuations.
Reports highlighting the vulnerability of roles involving repetitive tasks to automation are not novel. The notion that machines will displace human labor is as old as the machines themselves. What is noteworthy is the degree to which these fears now permeate the market, influencing even established, seemingly secure, enterprises.
The concerns surrounding American Express appear, at present, somewhat overstated. Prudent investors do not base decisions on fleeting headlines but on a long-term understanding of underlying fundamentals. The question, therefore, is not whether this stock will offer a quick profit, but whether it possesses the characteristics of a genuinely enduring investment.
A Position of Relative Strength
American Express reported a solid year in 2025. Revenue, net of interest expense, increased by 10% to $72.2 billion. This growth occurred against a backdrop of economic uncertainty, suggesting a degree of resilience. Payment volume rose by 7% to $1.7 trillion, demonstrating the scale of operations the company has achieved.
The company is attracting a younger demographic. As CFO Christophe Le Caillec noted, millennial and Gen Z customers now represent the largest share of U.S. consumer spending and are the fastest-growing cohort. This is a logical development. Younger consumers, with their longer potential lifetime value, are naturally attractive to any business seeking sustained growth.
American Express is competing effectively, not only with traditional credit card providers but also with more agile fintech companies. The ability to secure the loyalty of this valuable demographic is crucial. The company registered diluted earnings per share of 10% in 2025 and is targeting a mid-teens growth rate over the long term. This ambition will rely on maintaining a strong brand, increasing payment volume, expanding the number of active cards, and, inevitably, raising fees.
Valuation and Realistic Expectations
It is evident that American Express is a high-quality business. This should place it on any serious investor’s radar. The current market conditions offer a potentially worthwhile entry point. The stock trades at a forward price-to-earnings ratio of 17.5. This is not an extraordinary bargain, but it represents a reasonable valuation.
However, it is essential to maintain perspective. To classify American Express as a “millionaire-making stock” is a gross exaggeration. Such a designation implies the possibility of a 50-fold or 100-fold increase in share price. This is simply not a realistic expectation for a mature, established business, however well-managed.
The pursuit of extraordinary returns often leads to reckless speculation. A more sensible approach is to focus on identifying solid companies with sustainable growth prospects and accepting a reasonable, rather than fantastical, rate of return. The market rewards patience and prudence far more consistently than it rewards blind optimism.
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2026-03-15 23:22