We recently published a list of 10 Best Stocks to Buy According to Billionaire Warren Buffett. In this article, we are going to take a look at where American Express Company (NYSE:AXP) stands against other best stocks to buy according to billionaire Warren Buffett.
Known and admired for his success, wealth and philanthropy, Warren Buffett is still at the helm of his diversified holding company. From a struggling New England textile company in the 1960s, Buffett has grown Berkshire to a firm boasting a range of businesses from Geico insurance to BNSF Railway, an equity portfolio exceeding $267 billion, and a cash reserve of $334.20 billion at the end of 2024.
Given his success on the investment horizon – a result of decades of strong returns – it doesn’t come as a surprise that Buffett is often touted as one of the greatest investors of all time. In an attempt to mirror his trading activity, many investors search for what stocks is Warren Buffett buying today.
READ ALSO: Warren Buffett’s Portfolio: 15 Longest Held Stocks and 10 Stocks Warren Buffett and Insiders Are Crazy About.
The Oracle of Omaha focuses on companies with strong economic moats and undervalued assets, applying his well-known investment strategy – long-term value investing. Buffett is not that fond of diversification, as he is investing in businesses instead of stocks, picking those he understands.
While diversification as a risk mitigation technique is popular among those who are at the start of their investing journey, Buffett believes diversification could limit knowledge. He also doesn’t consider money the greatest investment tool, given his statement that “the best investment by far is anything that develops yourself, and it’s not taxed at all.”
Despite the strong market performance throughout much of 2024, Buffett appears to have taken a more cautious approach. With overinflated valuations due to high interest rates and deteriorating economic conditions in mind, he opted to sell off substantial stakes in companies whose valuations have become too high.
Buffett is also not fond of President Donald Trump’s tariffs on imports that sent shockwaves through global stock markets, even though his company’s Class B shares dipped 1.4% only on April 3, outperforming the broader market.
In the fourth quarter, Buffett’s 13F portfolio was comprised of a total of 38 security holdings and was worth roughly $267 billion, slightly up from $266 billion in the third quarter. Given that Buffett doesn’t like to diversify much, his top ten holdings account for nearly 90% of his 13F portfolio.
Our Methodology
To make the list of Warren Buffett’s top portfolio holdings we reviewed Berkshire’s fourth-quarter 2024 portfolio and ranked the list according to the hedge fund’s stake value in each firm. If there was an overlap, we prioritized the holding that was worth more money. We have also assessed the number of shares acquired by Berkshire Hathaway and hedge fund sentiment toward each stock from Insider Monkey’s database of hedge investor letters.
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% since May 2014, beating its benchmark by 218 percentage points (see more details here).
That said, please see if there are overlaps between our compilation of the 10 longest-held stocks by The Oracle of Omaha wrapped up in November, and a new list of Warren Buffett’s top portfolio holdings.
A close-up view of a payment terminal, capturing the sophistication of a payment network.
American Express Company (NYSE:AXP)
Portion of portfolio: 16.84%
Value of holdings: $44,996,539,653
The New York-based financial services company American Express Company (NYSE:AXP) operates as an integrated payments company and is known for its highly rewarding Membership Rewards program.
Buffett maintained his ownership stake in the company during the fourth quarter holding 151,610,700 of its shares.
The company wrapped up 2024, during which it issued 13 million new cards, with billings growth accelerating to 8% in the fourth quarter of 2024. That was fueled by stronger spending from consumer and commercial customers during the holiday season. Revenue for the quarter amounted to $17.2 billion, up 9% year-over-year, while net income rose 12% over the same period, exceeding $2.1 billion. American Express guided 8% to 10% revenue growth in 2025. The company’s growth is anticipated to be driven by a range of opportunities within its premium customer base going forward, particularly among Millennial and Gen Z consumers, as well as in key international markets.
For the first quarter the company reported $17 billion in revenue, up 8% year over year on an FX adjusted basis, or 9% excluding leap year impact. Net income was $2.6 billion or $3.64 per share. Total card member spending growth was 6% in the quarter, or 7% excluding leap year impact.
American Express said in March it has agreed to acquire the US-based expense management software provider Center for an undisclosed sum. Expected to close in the second quarter of 2025, the deal will boost American Express’ commercial card payments with automated accounting, policy compliance, and enhanced reward benefits.
Investment management company Bretton Capital Management called American Express, one of Warren Buffett’s top portfolio holdings in its fourth quarter 2024 investor letter its “best-performing stock” in the last year, boasting a 60% return, surpassing 2023’s 29%.
American Express’ shares traded at $267.06 per share on April 24, at the time of writing, losing 10.02% since the beginning of the year. The company has a market capitalization of $187.099 billion.
Overall, AXP ranks 2nd on our list of best stocks to buy according to billionaire Warren Buffett. While we acknowledge the potential of AXP as an investment, our conviction lies in the belief that some 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.