Episode summary
Amex Expenses Surge 12% as Marketing Costs for Cards Rise | Bloomberg Intelligence
Bloomberg Intelligence
· · 24 min · Hosts: Paul Sweeney, Scarlet Fu · Guests: Ben Elliott, Kunjan Sobhani, Dan Ives, Geetha Ranganathan
Summary
American Express said expenses jumped as it leaned harder into marketing to defend and grow its premium card base, and Ben Elliott argued that the higher costs are a deliberate tradeoff because the benefits arrive later. He said the company can offset the near-term pressure through higher card fees, especially on Platinum, and by pushing more customers toward higher-value products. He also pointed to AI as a longer-term lever for both efficiency and new revenue, including automated purchasing and travel tools.
On Intel, Kunjan Sobhani said the quarter was the cleanest and most fundamentally positive in years, with better execution in foundry, improving yields, and stronger confidence around outside customers. He argued that the stock’s post-earnings drop looked more like a reaction to higher spending and the resulting free-cash-flow pause than to the underlying business. Dan Ives echoed that view, saying Intel has become a barometer for AI and capex demand, and that investors should focus on execution rather than day-to-day stock moves.
Charter Communications was the weak spot. Geetha Ranganathan said revenue and subscriber trends keep deteriorating, broadband ARPU is under pressure, and there is no clear turnaround in sight. She noted that mobile bundling is helping, but only at the margins, while broader cable valuations remain depressed and the industry faces rising competition from fiber and fixed wireless.
Key takeaways
- Ben Elliott said American Express is accepting near-term expense pressure because higher card fees and retention gains should flow through later.
- Ben Elliott said Amex sees AI as a way to improve tech efficiency and potentially add revenue through AI travel and purchasing tools.
- Kunjan Sobhani said Intel’s quarter was its strongest in years, but higher spending is weighing on free cash flow and the stock.
- Dan Ives said Intel and the hyperscalers are being judged on AI capex and demand, not just on quarterly earnings beats.
- Geetha Ranganathan said Charter’s broadband losses and ARPU pressure are worsening, with no clear turnaround in sight.
Notable quotes
“the expenses happen right away and the benefits take a year or two to flow through P&L”
“we liked everything we saw. I mean after after quarters and quarters of facing hurdles and you know missteps this was the finally the most cleanest uh positive quarter from a fundamental perspective”
“there is just no turnaround in sight and that is making investors extremely nervous”
“the reality is some of these knee-jerk reactions I think could be misleading relative to the fundamentals”
How the episode opens
Bloomberg Audio Studios, podcasts, radio, news. You're listening to the Bloomberg Intelligence Podcast. Catch us live weekdays at 10 a.m. Eastern — On Apple CarPlay and Android Auto with the Bloomberg Business App. — Listen on demand wherever you get your podcasts or watch us live on YouTube. Alexis and I were just talking about how we're both Ammex card holders and we're trying to figure out the most economical way of transferring rewards points to your airline account and not have to pay fees.
Yeah. Uh I if you find a way to do that without paying fees, please do let me know because it just it varies on how much you're going to pay to to do the transfer. But I I feel like you know there's a fee for almost everything you do.
You know what? You need to go on Reddit because the folks on Reddit have like broken this down to a science. I'm doing all the details.
Let's bring in Ben Elliot. He's our consumer finance analyst. And he's going to talk to us about American Express earnings.
And Ben, a big part of what we're seeing from American Express is how much it spends on marketing these cards to Alexis, these cards to me. And you know, the Platinum card in particular is like their big money maker because the fees are almost $800.
That's right. Yeah. So, it's sort of a um you got to spend money to make money scenario for MX, right?
Um and and one of the challenges they're facing right now, which you can see in the response to earnings today, is that the expenses happen right away and the benefits take a year or two to flow through P&L. Um so one of the things that I saw that was very optimistic in the earnings was uh management guided towards uh higher card fee growth in the third quarter and then a higher run rate exiting 2024.
From the episode’s captions: roughly the first two minutes, lightly cleaned. Keep watching on YouTube →
Topics
- amex marketing expenses
- credit card premium cardholders
- intel foundry strategy
- semiconductor external customers
- charter communications earnings
Companies and tickers mentioned
- AXP
- INTC
- CHTR
- American Express
- Intel
- Charter Communications
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Summary, takeaways and quote selection by Octagon. Quotes are short excerpts; the full conversation is in the episode.
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