Dec 13 (Reuters) - Wall Street's main indexes were poised for a higher open on Friday, with futures tied to the Nasdaq outperforming their peers, after an upbeat forecast from Broadcom kept alive the euphoria around artificial intelligence and lifted chip stocks.
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 17.2% higher in premarket trading on the day.
"I'm not surprised when companies post earnings like that and up their guidance, especially in the area of AI which is probably the hottest sector right now, that most investors are getting so excited about," said Peter Andersen, founder of Andersen Capital Management.
"The stock rally is an aspect of this over enthusiasm for the sector."
The optimism spread to other chip stocks, with rival Marvell Technology (MRVL.O), rising 7.2%, Micron Technology (MU.O), gaining 2.4% and AI bellwether Nvidia (NVDA.O), edging up 1.7%.
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 8:30 a.m. ET, Dow E-minis were up 61 points, or 0.14%, S&P 500 E-minis were up 23.5 points, or 0.39% and Nasdaq 100 E-minis were up 187 points, or 0.86%.
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 2.1% following KeyBanc's upgrade of the cloud software seller's stock to "overweight" from "sector weight".
RH (RH.N), jumped 13.7% after the home furnishings retailer reported higher net revenue for the third quarter, compared with a year ago.
Reporting by Purvi Agarwal and Shashwat Chauhan in Bengaluru; Editing by Maju Samuel
