The University of Michigan will publish the October preliminary results of its widely followed consumer sentiment survey at 10:00 a.m. EDT this morning. After September’s final reading of 48.1 proved the second-lowest ever, the consensus mood forecast is sort of like a playlist of Lana Del Rey and Morrissey songs.

But new sales figures from Costco and a more specific survey of consumers’ personal well-being are singing a happier tune.

Kirkland-Sized Pantry Food for a K-Shaped Economy

Household spending rose 6.1% year over year in August, and growth has mostly accelerated since falling to 4.3% in December 2025, according to U.S. Bureau of Economic Analysis data. Considering that consumer spending is more than two-thirds of the US economy, you won’t need to consult the works of Paul Samuelson and Milton Friedman to appreciate why the bureau revised its reading of second-quarter GDP growth to 2.2% from 1.5%.

The evidence is piling up. Costco reported Wednesday that comparable US sales, factoring out gas prices, rose at an annualized 8% pace in September, compared to 5% one year ago. It marked a step up from July and August, when comparable US sales grew just 6.6% and 5.4%, respectively, after reaching nearly 9% in the late spring. Net sales in September rose 13% to $30 billion. Costco, the nation’s third-largest retailer after Walmart and Amazon, is considered a bellwether for middle-income consumers and suburban bulk buyers. Spending has also kept up at Walmart, which reported better than expected 5.9% revenue growth to $187.9 billion in the second quarter, representing lower-income spending.

One key factor sustaining consumers got a boost Thursday. The Labor Department reported weekly jobless claims fell 2,000 to 197,000 last week, keeping them near the lowest levels in half a century. “Job growth is trending above the pace needed to keep up with new entrants to the workforce,” said Bill Adams, the chief economist at Fifth Third Commercial Bank. “If current trends hold, the unemployment rate should reverse September’s increase and edge lower in coming months.”

Of course, all is not rosy — wage gains have been outpaced by inflation, leaving Americans with less room to save — but a stable labor market has provided income to spend. Meanwhile, some consumers have grown more optimistic:

• Deloitte said this week that its survey of consumers’ financial well-being held at 103.4 in August, eight points above where it was last year. Its index more narrowly tracks Americans’ feelings about their personal financial health and security than the Michigan Survey, which includes questions about the broader economy.
• Respondents told Deloitte they intend to spend more on both discretionary and nondiscretionary items, although naturally they expect prices to keep rising.

Snacking Slowdown: Not all US consumer sales are equal. While PepsiCo reported third-quarter net revenue rose 5.6% on Thursday, the company’s international business drove growth. Pepsi’s North American food volumes were flat, and its beverage volumes fell 2%. Time to patent ingestible GLP-1 Diet Mountain Dew.

The best defense is a good offense. That plus sovereign AI.

The latter point is why Goldman Sachs analyst Gabriela Borges slapped defense tech firm Palantir with an upgrade on Thursday, changing the stock’s rating to buy from neutral with a price target of $230 per share. Borges’s thesis? In an increasingly hostile and unwieldy digital world, governments and enterprises demand bespoke, localized AI systems (a.k.a., sovereign AI), and Palantir is well suited to meet that demand.

Many Models to Rule Them All …

Frontier labs such as OpenAI and Anthropic may be offering the most powerful and cutting-edge AI tools on the planet, but they’re a bit too squishy when it comes to storing, and possibly accessing, critical customer data. The dynamic is increasingly making their platforms a no-go for governments and major businesses, who have plenty of reasons to prioritize privacy. In fact, according to a recent report by The Information, Palantir is one of several major companies, including Nvidia and Booz Allen Hamilton, that is threatening to cease business with the frontier firms until it can receive guarantees that its data and intellectual property are not being misused.

Moving off the cloud and into local sovereign AI systems is one way around the problem, and Palantir, despite deriving its name from the magical seeing stones featured in “The Lord of the Rings,” is a little more privacy oriented. Borges says the market for bespoke software may outgrow packaged software in the upcoming years and that Palantir is poised to reap the rewards:

• “We believe enterprises are in the early stages of applying AI to their proprietary data to amplify their existing moats,” Borges wrote, adding that “industries with lower tech talent density” represent a particularly lucrative market for Palantir.
• A big edge Palantir has, according to Borges, is its “forward-deployed engineer” model, in which it sends software engineers to the frontlines of customer offices to help build sovereign AI systems using Palantir’s tools.

Forward Looking: Shares of the AI firm climbed 2.4% following the upgrade on Thursday and are now up some 12% year to date. Not bad, but it’s behind the tech-heavy Nasdaq 100’s 21% increase so far this year, nowhere near the 135% climb the stock took last year, and 340% rocket ship it rode in 2024. Weighing Palantir down this year has been its chunky multiple, with the stock trading at around 91 times forward earnings, way above the roughly 20 times forward earnings of the S&P 500.

It’s the AI of the tiger, the thrill of the fight.

Tiger Global stands to snag a $5 billion paper profit from its early bet on OpenAI, which is in talks to raise $30 billion at a $1.4 trillion valuation, Bloomberg reported Thursday. The firm invested $150 million in Sam Altman’s company back in 2021 before ChatGPT launched and has added to the investment over the years.

Risin’ Up

To borrow again from rock band Survivor’s song, Tiger Global certainly did its time and took its chances. After massive bets in tech companies seemed to pay off in 2020 and 2021 amid federal fiscal stimulus and historically low interest rates, Tiger became one of the “biggest losers” of hedge funds in 2022 when rates reversed, hemorrhaging $18 billion for the year, according to Institutional Investor.

Now, Tiger’s early bet may be the envy of tech-investment firms that jumped on the trend later, like SoftBank, which made its first investment in OpenAI in 2024. But the same moves that helped many investment firms stage post-pandemic comebacks could also spell systemic vulnerability within the sector:

• Concentration risk is a major concern. For example, while US venture investment climbed to record levels in the third quarter, AI accounted for 82.7% of deal value, according to the PitchBook-NVCA Venture Monitor.
• They’re also banking on optimism that AI demand will keep climbing, but there is no guarantee. On Thursday, The Financial Times reported that OpenAI’s annualized revenue is roughly $20 billion less than previously thought based on what the company had told investors.

Left Out: The concentration is bad news for many startups, too. In a recent report, Ginger Chambless, head of market insights for JPMorgan Commercial Banking, said that for founders “perceived as category leaders or platform-adjacent” conditions are highly favorable with strong valuations and tons of access to capital. “For others, the process can feel prolonged and uncertain as capital is concentrated within fewer deals than at any point this decade.”