AmEx business model is 'broken': Strategist

Recent hits to American Express highlight its fundamental flaws, a market strategist said on Wednesday.

"I certainly think the business model is broken," David Nelson, chief strategist at Belpointe Asset Management, told CNBC's "Closing Bell."

Read MoreAmEx hit with latest blow over merchant rules

On Thursday, a federal judge ruled that the financial services company's rules for merchants restrict retailers' ability to encourage consumers to use lower-cost cards. American Express also recently announced that it would end its yearslong partnership with Costco.

Man walking past American Express Travel Services office
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American Express transaction fees—about 2.5 percent—discourage businesses from accepting its cards, Nelson said. Despite the fact that shares have fallen about 11 percent this year, Nelson believes that other options in the financial sector hold more value.

However, businesses have always hesitated to carry American Express, Michael Yoshikami, CEO of Destination Wealth Management, told "Closing Bell." The stock may not pop immediately, but it has upside years down the road, he contended.

"You buy [American Express] because it's one of the few companies out there that actually has top-line revenue growth," Yoshikami said.

He believes it will "overcome" the loss of the Costco partnership.

Read MoreCostco to stop accepting AmEx cards from next April