3 Things Every American Express Investor Needs to Know

Core Insights - American Express reported a 10% year-over-year increase in revenue and a 13% rise in net income for Q4 2025, indicating positive financial trends [1] Group 1: Brand and Network Effect - Berkshire Hathaway holds 22% of American Express shares, reflecting the company's strong economic moat [2] - American Express offers premium credit cards that attract affluent customers who value excellent service and rewards [3] - The company operates a robust transaction processing infrastructure with 153 million active cards and 160 million merchant locations, creating a powerful network effect [4] - The competitive position of American Express is expected to remain strong due to its high-quality business model [5] Group 2: Revenue Composition - In Q4, American Express generated $9.9 billion from merchants, accounting for about half of its revenue, and collected $2.6 billion from membership fees [6] - Only 24% of sales came from net interest income, reducing credit risk and cyclicality compared to industry peers [6] - The company's ability to attract higher-income customers supports a spend-centric model, with average card member spending exceeding $25,000 in 2025 [7] Group 3: Stock Performance and Valuation - American Express shares have delivered a total return of 641% over the past 10 years, driven by strong financial performance [8]