American Express (AXP): An Analysis of The Role of AI and Payment Systems

Soumya Eswaran Mon, July 6, 2026 at 11:22 AM EDT 3 min read **

• AXP

Bretton Capital Management, an investment management company, released the "Bretton Fund" first-quarter 2026 investor letter. A copy of the letter can be downloaded here. In the volatile market, the Bretton Fund, which consists of 18 stocks, returned -9.06% in the quarter compared to -4.33% for the S&P 500 Index. American Express was the leading performance detractor, falling 1.4% due to AI disruption concerns. Please review the Fund's top five holdings to gain insights into their key selections for 2026.

In its first-quarter 2026 investor letter, Bretton Fund highlighted American Express Company (NYSE:AXP). American Express Company (NYSE:AXP) is a leading financial services company that operates as an integrated payments company. On July 2, 2026, American Express Company (NYSE:AXP) closed at $351.96 per share. One-month return of American Express Company (NYSE:AXP) was 13.29%, and its shares gained 7.26% over the past 52 weeks. American Express Company (NYSE:AXP) has a market capitalization of $240.15 billion.

Bretton Fund stated the following regarding American Express Company (NYSE:AXP) in its Q1 2026 investor letter:

"The largest detractor from performance this quarter was American Express Company** (NYSE:AXP), taking 1.4% off the fund, as it, along with fellow payment processors Visa and Mastercard, fell in value due to the perception that artificial intelligence would somehow replace them.

As we mentioned above, American Express was our biggest detractor in the quarter due to concerns about AI replacing payment systems. The payments space is enormously attractive since it grows with overall spending plus the secular shift from physical cash and checks. Not surprisingly there are plenty of entrants looking to break in

At heart, the core card companies—Visa, Mastercard, American Express—are digital infrastructure companies. They process massive volumes of transactions in real time. They ensure that the vendor gets their money, the customer gets their product, and if something fails along the way, it is made right. Visa and Mastercard leave the customer credit function to their partner banks; American Express acts as both the payment system and the bank for their cardholders who carry balances." (Click here to read the full text)

Is American Express (AXP) One of Billionaire Mario Gabelli’s Top 12 Dividend Stocks? American Express Company (NYSE:AXP) is not on our list of 40 Most Popular Stocks Among Hedge Funds Heading Into 2026. According to our database, 83 hedge fund portfolios held American Express Company (NYSE:AXP) at the end of the first quarter, the same as in the previous quarter. While we acknowledge the potential of American Express Company (NYSE:AXP) as an investment, we believe certain AI stocks offer greater upside potential and carry less downside risk. If you're looking for an extremely undervalued AI stock that also stands to benefit significantly from Trump-era tariffs and the onshoring trend, see our free report on thebest short-term AI stock.

Story Continues In another article, we covered American Express Company (NYSE:AXP) and shared the list of most undervalued Dow stocks to buy according to Wall Street analysts. In addition, please check out our hedge fund investor letters Q1 2026 page for more investor letters from hedge funds and other leading investors.