Where Will American Express Be in 5 Years?
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By Neil Patel – Dec 16, 2025 at 6:05AM ESTKey PointsBy adding new card holders who increase their spending, American Express has a clear growth playbook. The business has historically been able to raise the annual fees it charges for its cards, exhibiting pricing power. After seeing the stock's current valuation, investors might be more cautious. These 10 Stocks Could Mint the Next Wave of Millionaires ›NYSE: AXPAmerican ExpressMarket Cap$264BToday's Changeangle-down(0.07%) $0.28Current Price$382.84Price as of December 15, 2025 at 3:58 PM ETWith a total return of 238% in the past five years, this credit card giant has crushed the market.It seems like there are an unlimited number of companies out there offering credit cards. That might be the case, but American Express (AXP +0.07%) stands out above the crowd. Founded in 1850, the business has carved out a dominant position at the premium end of the market. And this has resulted in durable success. This financial stock has generated a total return of 238% in the past five years (as of Dec. 12), crushing the overall market. Where will American Express be five years from now? Image source: Getty Images. The growth strategy is straightforward I have a very high degree of confidence that American Express' business will be bigger and more powerful five years from now than it is today. Of course, the gains going forward might not resemble the past. But management is optimistic about the company's future. It previously revealed a goal for revenue to increase at a compound annual rate of 10% in the long run, with diluted earnings per share rising at a mid-teens yearly clip. The company's growth playbook is simple. It starts with acquiring more card members. Between the third quarter of 2020 and Q3 2025, this figure grew by 36%, with American Express now counting 151.2 million active cards. It's encouraging to see the business bringing on younger customers. The leadership team said on the latest earnings call that Gen Z and millennial consumers have strong engagement. Another factor is getting these card holders to increase their spending over time. The average spend per card was $6,387 in Q3, up 58% in the last five years. By being accepted at more locations worldwide, while also consistently introducing valuable partnerships and rewards, the value proposition can speak for itself.Advertisement American Express has pricing power Another factor that can have a notable impact on the company's success is pricing power. American Express' strategy involves occasionally raising the yearly fees on its cards. The Gold card saw its fee increase to $325 last year, while the Platinum card's fee was hiked to $895 this year. Average fee per card has jumped 72% since Q3 2020. It might seem silly that people would pay annual fees to be able to use a specific credit card. This is a key part of how the industry operates, though.
And American Express excels in this regard, thanks to its incredible brand strength. In the minds of consumers, being able to pull out an Amex card when paying for something might feel like status signaling. Besides providing top-notch perks and rewards, it helps that the company targets a more affluent customer base that has higher spending power. This keeps net charge-offs in check, which was a reported 1.9% in Q3, controlling losses in the process. American Express also deliberately markets itself as the premium credit card offering in the market. ExpandNYSE: AXPAmerican ExpressToday's Change(0.07%) $0.28Current Price$382.84Key Data PointsMarket Cap$264BDay's Range$379.79 - $385.7152wk Range$220.43 - $387.49Volume11Avg Vol2.6MGross Margin61.04%Dividend Yield0.83% Valuation might be a headwind With shares up 29% in 2025, the momentum has continued. As a result, the price-to-earnings (P/E) ratio sits at 25.7. That's not a bargain valuation; it's the most expensive multiple in the past three years. Investors who are concerned about the valuation might take comfort from the fact that Berkshire Hathaway is a sizable investor, owning 22% of American Express' outstanding shares.
The Warren Buffett-led conglomerate has owned the business for quite some time, so he's probably not worried about the current valuation. But investors can figure out that the Oracle of Omaha believes this is a high-quality company. Looking out five years from now, profit growth will provide a tailwind to the Amex share price. However, the rich P/E multiple can be a headwind, as investor expectations right now seem elevated. I see the stock being higher in five years, but I'm not sure it can outperform the overall market. About the AuthorNeil Patel is a contributing Motley Fool stock market analyst covering consumer staples, consumer discretionary, financials, information technology, and communication services. Prior to The Motley Fool, Neil worked in corporate finance roles at JPMorgan Chase and Capital One. He also has experience working on a start-up in the cryptocurrency space. He holds a bachelor’s degree in business administration with a specialization in finance from Ohio State University.TMFNeilPatelRead NextNov 28, 2025 •By George Budwell, PhD8 Dividend Stocks Every Investor Should ConsiderNov 24, 2025 •By Daniel SparksThis Is My Favorite Warren Buffett Stock, and It's One of His Biggest Bets (Hint: It's Not Apple or Alphabet)Nov 16, 2025 •By Courtney CarlsenThe Best Stocks to Invest $1,000 in Right NowNov 8, 2025 •By Jennifer Saibil1 Warren Buffett Stock to Buy Hand Over Fist in NovemberOct 31, 2025 •By Chris Neiger2 No-Brainer Warren Buffett Stocks to Buy Right NowOct 27, 2025 •By Daniel FoelberPrediction: This Dividend-Paying Dow Jones Growth Stock Will Beat the S&P 500 For the 6th Consecutive Year in 2026