During the August 6 Mad Money episode, host Jim Cramer highlighted a change in consumer behavior that continues to benefit major credit card issuers. Cramer noted that high consumer spending on travel and experiences has evolved from a temporary post-pandemic rebound into a sustained, long-term trend. He said:
Look, I knew that American Express, I knew that there’d be buoyancy because they got a rich clientele. But to see and hear that Bookings and the Expedia CEOs in the last couple of days tell a tale of incredibly robust vacation demand, I’m calling that downright encouraging. Now, it is true that post-COVID, there’s been a predilection to travel. That’s the long on money, short on time. I mean, that’s, in other words, like people came back from COVID and they said, you know what? I got to see the world. But I thought that would have been a little transitory. It now seems evergreen. And the CEOs of Delta and United Airlines they’ve embraced the storyline.
American Express: Premium Clientele Drives Resilient Spending
American Express Company (NYSE:AXP) remains uniquely insulated from broader consumer headwinds due to its affluent cardholder base. Premium cardholders historically maintain high spending levels regardless of macroeconomic shifts, driving fee-based income and credit quality. Cramer pointed out that the recent dip in the stock price creates an attractive entry point for long-term investors, “Hey, you know what? The stock of American Express is down 7% for the year. I like that, too.”
During the July 21 episode, he highlighted strong travel numbers as fuel for American Express. Cramer, with the help of options trader Bob Lang’s chart analysis, previously broke down AXP’s technical setup following a key moving average breakout. Cramer highlighted his classic playbook for American Express Company (NYSE:AXP), capitalizing on its routine post-earnings morning dip around 10:30 AM before the stock finds its footing, leveraging its high-margin annual fee model and premium cardholder spending.
Capital One Discover Merger Creates a Credit Card Powerhouse
During the episode, Cramer highlighted Capital One Financial Corporation (NYSE:COF) as a primary beneficiary of broader consumer spending trends, as he remarked:
Oh, I like Capital One, COF, as a way to play consumer spending now that it’s merged with Discover to become a heavy hitter in the credit card space. There’s opportunity there… Capital One’s down 9%. I think either can fit in your portfolio. I think both are going higher.
Cramer frequently points to Capital One as a prime beneficiary of consumer strength. He noted on June 17 that healthy consumer spending and tame delinquency rates provide a strong fundamental tailwind for the company. He stated:
While we do have a surprisingly strong consumer, that always helps. This May retail sales number we saw this morning, 0.9% rise from the previous month and a 6.9% increase from May of last year, oh, that’s healthy. Delinquencies are tame, meaning people are paying their credit card bills. That’s allowed a stock like Capital One, one of the big Charitable Trust names, which got slammed by higher oil prices, to become a virtual trampoline as it offers higher interest rate credit cards.
How Wall Street Values American Express Versus Capital One
In institutional portfolios, Capital One Financial Corporation (NYSE:COF) had a broader coverage among major funds, with 135 hedge funds holding positions in the stock in Q1 2026 compared to 136 in Q4 2025. American Express Company (NYSE:AXP) maintained steady institutional backing, held by 83 hedge funds across both quarters. Berkshire Hathaway held significant positions in both stocks in the first quarter of the year.
Their valuations highlight two distinct investment profiles. American Express trades at a higher forward price-to-earnings ratio of 19.5x, which reflects the premium commanded by its wealthy customer base and recurring annual fee revenue. In contrast, Capital One trades at 10.85x forward earnings, offering a lower-multiple way to gain exposure to consumer spending alongside potential benefits from the ongoing Discover integration.
Finally, short interest across both card issuers remains low. Capital One Financial Corporation (NYSE:COF) carries a short interest ratio of 2.36% of float, while American Express Company (NYSE:AXP) sits slightly lower at 2.20%.
While we acknowledge the risk and potential of AXP and COF as an investment, our conviction lies in the belief that some AI stocks hold greater promise for delivering higher returns and doing so within a shorter time frame. If you are looking for an AI stock that is more promising than AXP and COF and that has 10,000% upside potential, check out our report about this cheapest AI stock.
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