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In a significant development for the U.S. stock market, futures showed an upward trend on Friday. The tech-heavy Nasdaq 100 futures took the lead, buoyed by an optimistic forecast from chipmaker Broadcom. This forecast not only exceeded Wall Street estimates but also painted a picture of booming demand for its custom AI chips in the coming years.

"Broadcom's AI Chip Boom Spills Over to Stock Futures"

Broadcom's Impact on the Market

Broadcom's announcement on Thursday sent shockwaves through the market. Its shares surged by 14.5% in premarket trading, highlighting the market's enthusiasm for AI-related stocks. As Dan Coatsworth from AJ Bell pointed out, clients are excited about how AI could enhance their earnings, and this has put Broadcom on investors' radars as an alternative to Nvidia in the AI boom.This optimism extended to other chip stocks as well. Rivals like Marvell Technology rose 5.7%, Micron Technology gained 1.2%, and AI bellwether Nvidia edged up 1.1%. The persistent technology stock rally that propelled the Nasdaq above the 20,000 mark on Wednesday continued to gain momentum. An in-line inflation reading and the expectation of a 25-basis-point cut from the Federal Reserve next week added to the positive sentiment.Trader bets on the cut at the central bank's Dec. 17-18 meeting stand at over 96%, with a possibility of a pause in January. Paolo Zanghieri from Generali Asset Management believes that for 2025, there will be continued healthy growth and a gradual easing of inflation.

Stock Movements on Friday

At 7:00 a.m. ET, Dow E-minis were up 85 points, or 0.19%, S&P 500 E-minis were up 19 points, or 0.31%, and Nasdaq 100 E-minis were up 138.5 points, or 0.64%. Wall Street had a breather in the previous session after recent gains and some hot economic data ahead of the Fed's meeting, resulting in weekly losses for the benchmark S&P 500 and the Dow. However, the Nasdaq was on track to end the week higher.This year, the three main indexes have set multiple record highs as investors flocked to heavyweight tech stocks to capitalize on the AI hype. U.S. equities ended November on a strong note with Donald Trump's win in the presidential election boosting business-friendly policies and corporate profits. December has also started on a generally positive note.Among other movers, Salesforce was up 1.7% after KeyBanc upgraded its stock, while D.R. Horton eased 1% as J.P. Morgan downgraded its rating.(Reporting by Purvi Agarwal and Shashwat Chauhan in Bengaluru; Editing by Maju Samuel)