1 Reason Every Investor Should Know About American Express (AXP)

Key Points

• Amex targets affluent customers with fee-based cards and a rewards program.

• It has developed a robust premium model that's attracting younger spenders.

• 10 stocks we like better than American Express ›

American Express (NYSE: AXP) is one of the oldest companies in the country; it's celebrating its 150th anniversary this year. But you'd never know it from looking at its business. It's current, it's using technology throughout its business, and it's resonating with a young consumer base that should drive higher growth for decades.

Image source: Getty Images.

Where to invest $1,000 right now? Our analyst team just revealed what they believe are the 10 best stocks to buy right now. Continue »

Young, affluent, and spending

One thing that hasn't changed about American Express is its target clientele of affluent consumers. These shoppers have more money to spend than the average shopper, and they're more resilient under pressure. It's an excellent business model for American Express, which takes annual fees for many of its credit cards and rewards spending with attractive perks. The fees pad the bottom line, and the model generates loyalty, as customers renew year after year.

Over the past few years, it has made a concerted effort to pivot to a younger generation of heavy spenders. It has refreshed its card assortment and rewards program to appeal to this consumer base, and they now make up its highest spenders. In the second quarter, U.S. consumer spending increased 7% over last year, but while Gen Z spending made up only 5% of the total, it increased 39% year over year. Millennials, who now represent 30% of the total, had the second-highest growth at 10%.

CEO Stephen Squeri noted that the premium base is growing, and American Express has developed a premium model over the past 40 years that's difficult to replicate, with exclusive offerings like its airport lounges and solid relationships with luxury partners. It has an edge with this expanding market, and as these customers continue to spend with American Express, it has a long growth runway.

It should also give investors confidence in the company's ability to change with the times and successfully shift its business to meet current trends.

Should you invest $1,000 in American Express right now?

Before you buy stock in American Express, consider this:

The Motley Fool Stock Advisor analyst team just identified what they believe are the 10 best stocks for investors to buy now… and American Express wasn’t one of them. The 10 stocks that made the cut could produce monster returns in the coming years.

Consider when Netflix made this list on December 17, 2004... if you invested $1,000 at the time of our recommendation, you’d have $640,916!* Or when Nvidia made this list on April 15, 2005... if you invested $1,000 at the time of our recommendation, you’d have $1,090,012!*

Now, it’s worth noting Stock Advisor’s total average return is 1,052% — a market-crushing outperformance compared to 188% for the S&P 500. Don’t miss out on the latest top 10 list, available when you join Stock Advisor.

See the 10 stocks »

*Stock Advisor returns as of September 8, 2025

American Express is an advertising partner of Motley Fool Money. Jennifer Saibil has positions in American Express. The Motley Fool has no position in any of the stocks mentioned. The Motley Fool has a disclosure policy.