<div id="readability-page-1"><div> <h2>Key Points</h2><ul><li>American Express differs from other credit card companies, and its model gives it a durable competitive edge.</li><li>American Express stock has soundly beaten Visa and Mastercard, as well as the S&amp;P 500, over the past five years.</li><li>10 stocks we like better than American Express ›</li></ul>In Greg Abel's first quarter as CEO of Berkshire Hathaway (NYSE: BRKA)(NYSE: BRKB), he did exactly what he said he would. The former MidAmerican Energy executive has concentrated the holding company's vast $330 billion equity portfolio from 42 to 29 high-conviction stocks.He sold off many of the company's smallest positions, including financial giants Visa (NYSE: V) and Mastercard (NYSE: MA). Visa was the largest position sold, accounting for 1% of the total, while Mastercard was a smaller stake.Will AI create the world's first trillionaire? Our team just released a report on the one little-known company, called an &#34;Indispensable Monopoly&#34; providing the critical technology Nvidia and Intel both need. Continue »<img src="https://imageproxy.pbkrs.com/https://g.foolcdn.com/image//query-dXJsPWh0dHBzOi8vZy5mb29sY2RuLmNvbS9lZGl0b3JpYWwvaW1hZ2VzLzg3MTk3NS9hbWVyaWNhbi1leHByZXNzLW5ldy1wbGF0aW51bS1jYXJkLndlYnAmdz03MDA?x-oss-process=image/auto-orient,1/interlace,1/resize,w_1440,h_1440/quality,q_95/format,jpg" width="700" height="466" original-src="https://imageproxy.pbkrs.com/https://g.foolcdn.com/image//query-dXJsPWh0dHBzOi8vZy5mb29sY2RuLmNvbS9lZGl0b3JpYWwvaW1hZ2VzLzg3MTk3NS9hbWVyaWNhbi1leHByZXNzLW5ldy1wbGF0aW51bS1jYXJkLndlYnAmdz03MDA"/>Image source: American Express. What's more notable is the credit card stock he didn't sell -- American Express (NYSE: AXP). American Express has been one of Warren Buffett's favorite stocks for the decades it's been in the portfolio, and it's one of the three stocks he said he'd never sell (the other two are Coca-Cola and Apple).Here's why Abel is holding onto American Express stock.<h2>The distinctive credit card model</h2>Buffett has made it clear on several occasions that he looks for excellent businesses, calling himself a &#34;business picker, not a stock picker.&#34; One of the most important things he looks for in an excellent business is a durable competitive edge -- that means it has a wide enough moat to keep competitors at bay for a long time.American Express has developed a distinctive business model in several ways, and it has successfully withstood the test of time, adapting to new trends while retaining the essential elements that make it stand out.<h3>The membership model</h3>American Express' core business is credit cards, but most of them are fee-based; 70% of new products were fee-based in the 2026 first quarter. This membership piece is a critical element of the model; it generates recurring revenue through the annual fee, which also boosts loyalty. The company pioneered the rewards program, which is a key reason customers love American Express and are willing to pay an annual fee. Fees increased 18% year over year in the first quarter and accounted for 14% of revenue.<h3>The focus on the affluent</h3>This also works with the focus on the affluent customer, who has the money to pay for the privilege of using an Amex card and enjoys the perks that focus on travel, leisure, shopping, and fine dining. This cadre is resilient even under economic pressure, driving a resilient business.<h3>The closed-loop system</h3>American Express has its own bank that funds the credit for the card business. This gives it tight control over operations, keeps the fees in-house, opens up more revenue streams, and hedges against high interest rates that could depress spending, since it can charge higher rates on loans.<h2>More than a credit card network</h2>Visa and Mastercard are excellent businesses, and their different models do serve as a benefit in that they're not exposed to credit, like American Express is. That may be why Buffett held small positions in them for so long. However, when compared, both Buffett and Abel clearly see American Express' features as more compelling.This has been borne out, in fact, over the past five years of macroeconomic volatility. The blue chip giant has outperformed Visa and Mastercard by more than double, including dividends. It's also beaten the S&amp;P 500.<img src="https://imageproxy.pbkrs.com/https://g.foolcdn.com/image//query-dXJsPWh0dHBzOi8vbWVkaWEueWNoYXJ0cy5jb20vY2hhcnRzL2NhYzY5ZWYyODIwMTdlNDZhNWQwZjUxYjA0MDEwY2EwLnBuZyZ3PTcwMA?x-oss-process=image/auto-orient,1/interlace,1/resize,w_1440,h_1440/quality,q_95/format,jpg" width="700" height="476" original-src="https://imageproxy.pbkrs.com/https://g.foolcdn.com/image//query-dXJsPWh0dHBzOi8vbWVkaWEueWNoYXJ0cy5jb20vY2hhcnRzL2NhYzY5ZWYyODIwMTdlNDZhNWQwZjUxYjA0MDEwY2EwLnBuZyZ3PTcwMA"/>AXP Total Return Level data by YChartsThis is the benefit of its durable competitive advantage and why American Express is a reliable, valuable stock.<h2>Should you buy stock in American Express right now?</h2> 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 $463,900!* Or when Nvidia made this list on April 15, 2005... if you invested $1,000 at the time of our recommendation, you’d have $1,294,401!* Now, it’s worth noting Stock Advisor’s total average return is 978% — a market-crushing outperformance compared to 211% for the S&amp;P 500. Don't miss the latest top 10 list, available with Stock Advisor, and join an investing community built by individual investors for individual investors. See the 10 stocks » *Stock Advisor returns as of May 31, 2026. American Express is an advertising partner of Motley Fool Money. Jennifer Saibil has positions in American Express and Apple. The Motley Fool has positions in and recommends American Express, Apple, Berkshire Hathaway, Mastercard, and Visa. The Motley Fool has a disclosure policy. The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc. </div></div>

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Greg Abel, CEO of Berkshire Hathaway, sold Visa and Mastercard stakes in Q1, reducing the portfolio to 29 high-conviction stocks. He retained American Express, a long-time Buffett favorite, citing its durable competitive edge from a membership model, affluent focus, and closed-loop system. Amex has outperformed Visa, Mastercard, and the S&P 500 over five years.

- American Express maintains a competitive edge through its distinctive fee-based membership model, focusing on affluent customers and generating recurring revenue.  
- In contrast to Visa and Mastercard, American Express has demonstrated superior performance, particularly during economic volatility, outperforming these competitors and the S&P 500 over the past five years.  
- While some analysts recommend other stocks, American Express remains a favored choice for Warren Buffett and continues to be a reliable investment option.

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Greg Abel Just Sold Both Visa and Mastercard Stock but Kept This Top Buffett Favorite