Warren Buffett is stepping down soon as the CEO of Berkshire Hathaway, but he still has some time left to make decisions in his role. It will be intriguing to see whether or not incoming CEO Greg Abel makes any major changes to the company's equity portfolio when he takes over.
Whatever happens, Buffett will remain an investing legend for Berkshire Hathaway's incredible performance during his tenure. Many of his stocks are still solid buys today, and Visa (V -0.14%) and American Express (AXP 0.69%) look like good ones right now.
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1. Visa: Growing with the economy
Visa is the largest credit card network in the world. It has more than $16 trillion in trailing-12-month payment volume and works with 14,500 partnering institutions. It's accepted by more than 150 million merchants.
In general, Visa's performance is a good indication of what's happening in the economy, since it depends on consumer spending. In its fiscal 2025's third quarter (ended March 31), the company demonstrated momentum, and it expects that to persist.
Revenue increased 14% year over year to $10.2 billion, beating analyst expectations of $9.85 billion. Earnings per share (EPS) based on adjusted generally accepted accounting principles were up 23% to $2.98, higher than Wall Street expectations of $2.85. Management said there was resilience in both discretionary and nondiscretionary categories.
Although Visa is an established financial giant, it's very much in tune with new technology and other trends. It pioneered the chip-enabled credit cards that make contactless payments possible and are still a relatively new phenomenon, and it's bringing artificial intelligence (AI) and stablecoins into new product development.
For example, it's testing Visa Intelligent Commerce, which allows customers to make purchases through AI agents. The company has moved beyond being a simple credit card network, and its other categories are driving higher growth. Visa Direct, for example, is the largest global money-movement program in the world, and transactions increased 25% year over year in the second quarter.
The stock dropped after the company announced third-quarter earnings this week. The market seemed disappointed that it didn't raise its full-year outlook, even though it maintained that tariffs wouldn't have a strong negative effect. The stock is still outpacing the S&P 500 this year, but it's a great time to buy shares before they start climbing again.
2. American Express: The closed-loop model
American Express is also a credit card network, but it's a lot more than that, too. It has features that make it stand out from other financial stocks and that make it one of Buffett's favorite stocks.
Beyond its credit cards, Amex also has a full banking segment. It has a closed-loop model, which means it funds its own credit cards, rather than partnering with other financial institutions, like Visa does.
There are several benefits to this model. One is that as a bank, it has a lot of cash from deposits, with which it makes net interest income. That's a great feature for when interest rates are high and spending is low, which hurts the credit card segment. In the second quarter, net interest income increased 14% over last year and represented about 23% of total revenue.
It also has a fee-based model, and although it does offer some no-fee options, most of its cards have an annual fee. That creates a cycle of recurring revenue and generates loyalty; customers love the rewards program that they get by paying the annual fee. Revenue increased 9% year over year in the 2025 second quarter, and fees increased 20%, accounting for 14% of the total.
The company targets an affluent clientele that's generally more resilient than the mass market and tends to spend more. It's resonating with younger shoppers, who continue to drive growth. Millennials' spending increased 10% year over year in the second quarter, and Gen-Z spending was up 40%. As they use Amex products throughout their financial journeys, they're likely to fuel growth for a long time.
The company added 3.1 million new cards in the second quarter, which is a typical addition for AmEx. 1.5 million were U.S. consumer cards (the remainder were business or international consumer cards), which is low for the industry.
The beauty of this is that AmEx doesn't need to add millions of customers to get the same revenue as other credit card companies do because its customers spend much more than the mass consumer. Adding fewer customers but higher-spending ones each quarter leaves open a long growth runway. For comparison, its trailing-12-month revenue is almost double Visa's.
Wall Street wasn't thrilled with the company's second-quarter results, as was the case with Visa, indicating that the market is expecting more in light of the improving economy. American Express stock is up just slightly year to date, but it offers years of continued potential gains for long-term investors.
