Travel services provider Expedia Group Inc. (NASDAQ:EXPE)’s shares are up by 58% over the past year and by 13.5% year-to-date. The firm reported its second quarter earnings earlier this week and posted $4.32 billion in revenue and $5.76 in adjusted profit per share to beat analyst estimates of $4.17 billion and $5.23. Crucially, Expedia Group Inc. (NASDAQ:EXPE) also raised its full year revenue and bookings forecasts. For the revenue, it now expects to earn $16.05 billion to $16.22 billion, up from the previous $15.6 billion to $16.0 billion. As for the bookings, Expedia Group Inc. (NASDAQ:EXPE) hiked the guide to $129.5 billion to $130.8 billion from the earlier $127 billion to $129 billion. The firm’s optimism pointed towards a robust travel industry despite the high gasoline prices that Americans are facing off against. The optimism was caught by Cramer’s watchful radar as well:
“This may be the quarter where people say, even though the gasoline went up, well it came down a little bit, even though the K part of the consumer is not doing well, Expedia following Bookings, with another blowout. And I look at thee two and I say, wait a second, these say the consumer. . .is really good. This is a nice view of spend. Maybe circle back to American Express, maybe American Express wasn’t that [inaudible] and the company was just being conservative. If you put up AXP, that’s the one people said, well, it didn’t do that well. I think it’s time to go back to American Express. I think Steve Squeri did a very good job, he’s always been understated, the other guys, a little more promotional. But travel is on fire.”
American Express Company (NYSE:AXP) is one of Jim Cramer’s favorite stocks in the sector. Throughout 2025, he regularly praised the firm’s payment cards and their popularity with younger users. The shares, while up by 12% over the year, are down by 8% year-to-date. The earnings that Cramer referred to in his remarks were American Express Company (NYSE:AXP)’s second quarter results reported in the morning on July 24th. They saw the firm beat analyst profit estimates but disappoint investors on the guidance front by keeping the full year per share profit guide unchanged at $17.30 to $17.90.
While Cramer was focused on the guide and the importance of the results to consumer spending, the debate surrounding Expedia Group Inc. (NASDAQ:EXPE) is broader than that. It primarily concerns the firm’s business-to-business (B2B), which covers hotels, airlines and other businesses. The firm’s bulls argue that the B2B platform is a growth engine on its own and is not simply masking troubles in the consumer end of the business. Additionally, they believe that Expedia Group Inc. (NASDAQ:EXPE) can use B2B to diversify away from the consumer business marked by high competition. Additionally, they are also impressed by EBITDA margin growing to 25.9% in Q2 and a hike to full year margin guidance. Yet the bears point towards the costs of using AI to expand margins, competition in the market from rivals such as Google and threats to the loyalty ecosystem from hotels.
As for American Express Company (NYSE:AXP), Cramer’s remarks about the state of the travel market are more relevant as the bulls and the bears are divided on the durability of the firm’s premium customer base. While the bulls believe that the high-end market is resilient to broader tightness and shocks, the bears argue that since American Express Company (NYSE:AXP) depends on corporate spending, a slowdown stands the chance to significantly affect the firm.
Shifting towards hedge funds and valuation, 83 hedge funds part of Insider Monkey’s Q1 database had held a stake in American Express Company (NYSE:AXP), while the figure stood at 62 for EXPE. The funds, it appears, are also betting on the premium travel market. Additionally, American Express Company (NYSE:AXP) is also a more established firm in its sector. It also carries a richer valuation with a forward P/E of 19.42 compared to EXPE’s 16.16.
While Insider Monkey acknowledges the risk and potential of AXP as an investment, our conviction lies in the belief that some AI stocks hold greater promise for delivering higher returns and have limited downside risk. If you are looking for an AI stock that is more promising than AXP that has 100x upside potential, check out our report about the cheapest AI stock.
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Disclosure: None.
