Abel's American Express Gamble: A Bet on Long-Term Value

Greg Abel's first move as Berkshire Hathaway CEO has raised eyebrows. He maintained American Express as a core holding, despite it underperforming Visa and Mastercard year-to-date.

The company is an exception to the trend of Berkshire reducing its exposure to financial stocks. In fact, its stake in American Express has increased due to stock buybacks, not additional share purchases. This boosted Berkshire's ownership to nearly 24% of the entire company, worth $49.2 billion.

Abel identified American Express as a stock that Berkshire understands well and trusts its management team. He expects it to compound over the long term and has reaffirmed Berkshire's concentrated approach. The company is generating all-time high revenue and earnings, with forecast 10% year-over-year revenue growth in 2026.

Under Abel's leadership, Berkshire still views American Express as a long-term compounder and its highest conviction stock in the payment processing sector. Holding onto it allows Berkshire to retain exposure to a high-quality, multi-faceted financial stock that is distinct from other public equity holdings and company-controlled insurance businesses.