Is American Express a good long-term investment? Its buy-and-hold prospects explained

Like getting a driver’s licence oregon graduating from college, owning a recognition paper is considered a rite of transition into American adulthood.

Credit paper companies typically pull young customers by offering them “no fee” cards with fewer benefits. These companies assume, due to the fact that of their cardholder’s constricted recognition past and deficiency of disposable income, that they can’t spend the fees that travel on with much premium perks.

But Stephen Squeri turned that exemplary connected its caput erstwhile helium became American Express’s CEO successful 2018 — and shareholders person been amply rewarded since.

Mindful of his 4 daughters’ tastes for the finer things successful life, Squeri understood that affluent young radical person nary occupation paying for a premium paper — truthful agelong arsenic they person perks they really want.

“The world is,” Squeri told Fortune, “these Gen Z and Millennials emotion premium, they emotion getting thing that’s luxe. I viewed them arsenic educated consumers who emotion luxury. They besides emotion value. I said, ‘Wait a minute, these kids are smart.’”

Amex’s turnaround communicative

But Squeri inherited a institution successful crisis, 1 that was inactive reeling from the 2015 nonaccomplishment of its concern with Costco, which had accounted for 10% of American Express’ planetary business. In addition, accrued contention from premium cards by Chase and Capital One challenged Amex’s once-dominant presumption successful the luxury recognition paper market.

And so, Squeri “doubled down” by expanding Amex’s selling fund to absorption heavy connected the integer and hunt channels Millennials and Gen Z usage — spending $4.1 billion successful 2018 alone, according to the company’s 10-Q.

He besides orchestrated large overhauls with its Gold and Platinum cards, portion drastically raising their yearly fees. The revamped Gold card, for instance, introduced 4 times greater perks astatine restaurants and market stores, portion its yearly interest accrued from $195 successful 2017 to $325 successful 2026.

Changes to Amex’s Platinum paper were adjacent much dramatic: Cardmembers received entree to implicit 1,550 airdrome lounges, Uber One perks, and connection credits connected Lululemon, Resy, and Ōura — each for an $895 yearly interest successful 2026 (a $345 summation from 2017).

A agleam young aboriginal for Amex

Squeri’s large stake paid disconnected — large time. Millennials and Gen Z present marque up implicit 60% of each caller American Express accounts, and they are spending much each year.

They are besides utilizing Amex’s integer services, specified arsenic its app, much than older generations do, which allows them to bask peculiar programs and perks, similar the Amex-only events astatine the Coachella Music Festival.

And that “member since” designation provides Millennials and Gen Z with priceless intangible benefits, too, similar status.

Squeri sees a beingness of worth successful these premium customers. Speaking astatine the 2024 Goldman Sachs U.S. Financial Services Conference successful New York, helium described this caller demographic by saying, “They don’t walk arsenic overmuch close present arsenic a Gen Xer oregon a [Baby] Boomer, and they don’t get arsenic much, but we judge they’ll person 20 much years of narration with us.”

Related: How galore employees does American Express person successful 2026? Its workforce, locations, and layoffs explained

The impervious is already evident successful AXP’s earnings. In the years since Squeri began starring the company, American Express shares person delivered 16.6% yearly returns, beating JPMorgan Chase (JPM), Visa (V), and adjacent the S&P 500.

Amex posted continued spot successful the archetypal 4th of 2026, arsenic well. It reported $18.91 cardinal successful revenue, which was an 11% summation implicit 2025, and net per stock of $4.28, an 18% summation implicit the anterior year. These results were 7.2% higher than expert estimates.

Its youngest cardholders were liable for the bulk of Amex’s year-over-year spending growth, with Gen Z up 38% and Millennials up 13%, portion Gen X accrued 8% and Baby Boomers conscionable 4%.

The institution besides raised its quarterly dividend by 16% to $0.95 per share, oregon $3.80 per year, which is yet different awesome of Amex’s fiscal wellness, arsenic it demonstrates unchangeable currency travel and management’s assurance successful the future.

Related: Where is American Express' headquarters? Why the institution is moving to 2 World Trade Center

What could dilatory Amex’s momentum?

While Amex’s translation nether Squeri has been remarkable, adjacent the champion investments travel with their stock of risk, and truthful investors indispensable besides see the challenges that could impact Amex’s trajectory successful the coming years.

For one, Squeri can’t power the broader economy, and his concern remains highly babelike connected user spending.

A recession, for instance, could interaction travel, entertainment, and discretionary purchases — adjacent for the affluent customers Amex relies on.

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Traders connected the prediction marketplace Kalshi estimation a 41% accidental of a recession happening successful 2027, owed to fears that the “cracks forming today” successful the economy, successful presumption of volatile vigor prices, elevated user recognition balances, and pressures connected firm refinancing — some stemming from higher involvement rates — travel to a head.

That doesn’t mean a recession is inevitable. In fact, Kalshi had besides predicted a 36.9% accidental of a recession happening successful 2026 up until April 2026, but definite facts — that firm net proceed to outpace estimates, the unemployment complaint has remained dependable astatine 4.3%, and the S&P 500 is posting grounds highs — person led galore to judge that the system is stronger than antecedently estimated, astatine slightest for now.

In addition, contention successful the premium recognition paper marketplace remains red-hot, arsenic JPMorgan Chase and Citigroup person each taken a leafage from Amex’s playbook and rolled retired their ain premium offerings.

The Chase Sapphire Reserve card, for example, is considered the closest rival to Amex’s Platinum paper — it offers a assortment of question and eating credits portion sporting a little yearly interest of $795. The Capital One Venture X paper provides entree to the Capital One airdrome lounge, among different perks, and has a importantly little fee, astatine $395.

Related: History of American Express: Company timeline & facts

This communicative was primitively published by TheStreet connected Jun 10, 2026, wherever it archetypal appeared successful the Investing section. Add TheStreet arsenic a Preferred Source by clicking here.