Nasdaq futures lead advance after Broadcom's upbeat forecast
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Broadcom jumps as it forecasts Q1 revenue above estimates
Salesforce up after rating upgrade
S&P, Dow set for weekly declines, Nasdaq eyes gains
Futures up: Dow 0.19%, S&P 500 0.31%, Nasdaq 0.64%
Updates prices throughout, adds comment
By Purvi Agarwal and Shashwat Chauhan
Dec 13 (Reuters) -U.S. stock index futures rose on Friday, with those tied tothe tech-heavy Nasdaq 100 in the lead, after an upbeat forecast from chipmaker Broadcom kept alive the euphoria around artificial intelligence.
Broadcom AVGO.O forecast quarterly revenue above Wall Street estimates on Thursday and predicted booming demand for its custom AI chips in the next few years, sending its shares 14.5% higher in premarket trading on the day.
"Clients have been jumping up and down with excitement at how AI could supercharge their earnings ... this hive of activity has also put Broadcom on investors' radar as an alternative way to play the AI boom than just Nvidia," said Dan Coatsworth, investment analyst at AJ Bell.
The optimism spread to other chip stocks, with rival Marvell Technology MRVL.O rising 5.7%, Micron Technology MU.O gaining 1.2% and AI bellwether Nvidia NVDA.O edging up1.1%.
This comes on the heels of a persistent technology stock rally that propelled the Nasdaq above the 20,000 mark for the first time on Wednesday. An in-line inflation reading cementing a 25-basis-point cut from the Federal Reserve next week added to the momentum.
Trader bets on the cut at the central bank's Dec. 17-18 meeting stand at over 96%, according to CME's FedWatch Tool. However, they indicate chances of a pause in January.
"For 2025, we expect continued healthy growth and a very gradual easing of inflation. (Federal Open Market Committee) officials have suggested that current policy is now at a point where further reductions could occur more slowly," said Paolo Zanghieri, senior economist at Generali Asset Management.
At 7:00 a.m. ET, Dow E-minis 1YMcv1 were up 85 points, or 0.19%, S&P 500 E-minis EScv1 were up 19 points, or 0.31% and Nasdaq 100 E-minis NQcv1 were up 138.5 points, or 0.64%.
Wall Street had taken a breather in the previous session after recent gains and some hot economic data ahead of the Fed's meeting, setting the benchmark S&P 500 and the Dow for weekly losses. However, the Nasdaq was on track to end the week higher.
The three main indexes have set multiple record highs this year, as investors flocked to heavyweight tech stocks to capitalize on the hype around AI.
U.S. equities ended November on a strong note after Donald Trump's win in the presidential election on the prospects of business-friendly policies adding to corporate profits, and they have kicked off December on a broadly positive note.
Among other movers, Salesforce CRM.N was up 1.7% after KeyBanc upgraded the cloud software seller's stock to "overweight" from "sector weight", while D.R. Horton DHI.N eased 1% as J.P. Morgan downgraded its rating on the homebuilder to "underweight".
Broadcom revenue https://reut.rs/3ZRtsh0
Most S&P 500 sectors set for weekly losses https://tmsnrt.rs/3BnGklv
Reporting by Purvi Agarwal and Shashwat Chauhan in Bengaluru; Editing by Maju Samuel
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