Nasdaq futures lead gains after Broadcom’s upbeat forecast

(Reuters) – U.S. stock index futures rose on Friday, with those linked to the tech-heavy in the lead, after an upbeat forecast from chipmaker Broadcom (NASDAQ:) kept alive the euphoria around artificial intelligence.

Broadcom 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 15% 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 (NASDAQ:),” said Dan Coatsworth, investment analyst at AJ Bell.

The optimism spread to other chip stocks, with rival Marvell (NASDAQ:) Technology rising 5.6%, Micron Technology (NASDAQ:) gaining 2% and AI bellwether Nvidia up 1.1%.

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 after numerous Fed officials last week cautioned a slower pace of easing going forward.

At 5:25 a.m. ET, Dow E-minis were up 97 points, or 0.22%, E-minis were up 19 points, or 0.31% and Nasdaq 100 E-minis were up 138.75 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 (NYSE:) was up 1.8% after KeyBanc upgraded the cloud software seller’s stock to “overweight” from “sector weight”.