The “Magnificent Seven” have been all the rage in the stock market for several years now. For those unfamiliar with the term, the Magnificent Seven stocks include Apple, Alphabet, Amazon, Meta Platforms, Nvidia, Microsoft, and Tesla. These companies are worth trillions of dollars, and have their nose in almost every major industry across the modern technology sector, from smartphones to data centers.
These stocks have carried the broader market for a while now, but nothing lasts forever. At some point, companies become too large to continue growing so easily. It could be wise to move on and look elsewhere for stocks that can help carry a portfolio over the coming years. One sizzling candidate is financial stock American Express (NYSE: AXP).
Will AI create the world’s first trillionaire? Our team just released a report on the one little-known company, called an “Indispensable Monopoly” providing the critical technology Nvidia and Intel both need. Continue »
Most investors know American Express stock for its premium credit cards, but its closed-loop business model includes its own payment network and lending, which together complete the credit card ecosystem. American Express has been around for decades, but here’s why it should grab your attention now and moving forward.
Embracing the next generation of spenders
Credit card borrowing is a pillar of the U.S. economy. Today, credit card debt among U.S. households stands at a whopping $1.25 trillion, near an all-time high. Over the coming years, spending power will shift from today’s older, more financially established consumers to younger workers in the millennial and Gen Z demographics.
American Express is already embracing the trend. Young spenders are living in the moment more amid inflation and high housing costs. American Express’ premium charge cards, Gold and Platinum, charge hefty annual fees but offer various perks and credits for lifestyle spending, such as dining and air travel.
These financial products have resonated with the new generations. Millennials and Gen Z have accounted for the highest percentage of American Express’ new customers over the past several years, and the group recently became the company’s largest share of consumer card spending in the United States.
The future looks bright as a result
Similar to advertising or any business that counts on consumers spending more, the up-and-coming consumer is the most valuable and desired customer. American Express’ success in attracting young spenders will bode well for its long-term growth. Currently, analysts expect the company’s earnings to grow at a brisk 14% annualized rate over the next three to five years.
