Warren Buffett’s Top Holding Trades 21% Below Peak, Offering a Path to Double a $1,000 Investment in Five Years

Key Points

• American Express currently trades at a price-to-earnings ratio of 18.6, leaving room for multiple expansion.

• Management projects mid-teens long-term earnings growth, highlighting the primary driver of shareholder returns.

Berkshire Hathaway holds dozens of stocks in its massive $356 billion portfolio, though a significant portion is concentrated in a few names.

American Express (NYSE: AXP) stands as the conglomerate’s second-largest holding, with Berkshire owning 22.5% of outstanding shares valued at $46.3 billion.

Currently trading 21% below its all-time high from December 2025, this Berkshire Hathaway favorite presents a compelling opportunity to double a $1,000 investment over the next five years.

Image source: The Motley Fool.

Valuation upside remains a key driver of shareholder returns. Purchasing at a price-to-earnings (P/E) ratio of 18.6 represents a 23% discount compared to the start of 2026. A reasonable projection suggests the P/E multiple could expand to 20 within five years, adding further upside.

American Express must also execute effectively, which it has consistently done. Profit growth serves as the second major catalyst for returns. In January, management outlined a long-term forecast targeting “mid-teens” earnings-per-share growth.

The interplay of valuation expansion and robust profit growth positions American Express to potentially double its stock price over the next five years, suggesting a $1,000 investment could grow to $2,000 by late 2031.

Should you buy stock in American Express right now?

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American Express is an advertising partner of Motley Fool Money. Neil Patel has no position in any of the stocks mentioned. The Motley Fool has positions in and recommends American Express and Berkshire Hathaway. The Motley Fool has a disclosure policy.

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