Nasdaq Futures Rise Following Broadcom's Positive Outlook

By Purvi Agarwal and Shashwat Chauhan

U.S. stock index futures saw an increase on Friday, particularly those related to technology stocks, after chipmaker Broadcom released an optimistic forecast that fueled excitement around artificial intelligence (AI).

On Thursday, Broadcom predicted its quarterly revenue would exceed Wall Street expectations, citing a surge in demand for its specialized AI chips in the years ahead. This announcement caused Broadcom's shares to jump by 14.5% during premarket trading.

Investment analyst Dan Coatsworth from AJ Bell mentioned, "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."

Such optimism spread through the semiconductor sector, with Marvell Technology witnessing a 5.7% rise, Micron Technology up by 1.2%, and AI leader Nvidia gaining 1.1%.

This surge follows a strong performance in technology stocks, which helped push the Nasdaq Composite Index above the 20,000 point mark for the first time on Wednesday. Additionally, a recent inflation report suggests a likely 25-basis-point interest rate cut from the Federal Reserve next week, further enhancing market confidence.

Trader expectations indicate there is over a 96% likelihood of a rate cut during the Federal Reserve's meeting on December 17-18, although there are signs of a possible pause in January.

Paolo Zanghieri, a senior economist at Generali Asset Management, stated, "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."

By 7:00 a.m. ET, Dow E-minis had climbed by 85 points or 0.19%, while S&P E-minis were up 19 points, equivalent to 0.31%, and Nasdaq 100 E-minis showed an increase of 138.5 points, or 0.64%.

Wall Street appeared to take a pause in the previous trading session after recent gains and some robust economic data, positioning the benchmark S&P 500 and the Dow for slight weekly losses. Nonetheless, the Nasdaq was poised to conclude the week in positive territory.

This year, the three main indexes have reached several record highs, driven largely by a rush into major tech stocks as investors seek to capitalize on the AI hype.

U.S. equities wrapped up November on an upbeat note, riding the wave of optimism following Donald Trump's presidential election victory, which raised expectations for business-friendly policies to boost corporate profits. The positive sentiment has carried into December as well.

In other market movements, Salesforce shares rose by 1.7% after KeyBanc upgraded the cloud software company's stock from "sector weight" to "overweight." Conversely, D.R. Horton saw a decline of 1% following a downgrade from J.P. Morgan, which lowered its rating on the homebuilder to "underweight."

futures, Nasdaq, Broadcom