US STOCKS-Nasdaq, S&P 500 futures slip on Broadcom's AI margin warning

By Johann M Cherian and Pranav Kashyap

Dec 12 (Reuters) - Futures tracking the S&P 500 and the Nasdaq slipped on Friday as Broadcom's latest results reignited fears of an AI-fueled bubble and tempered the optimism sparked by a less hawkish commentary than expected from the Federal Reserve on 2026 rate cuts .

Broadcom AVGO.O shares fell nearly 6% in premarket trading after the chipmaker warned of lower future margins on its AI system sales, despite forecasting strong quarterly revenue, deepening concerns about the profitability of investments in the technology.

Other chip stocks including Advanced Micro Devices AMD.O and Nvidia NVDA.O lost 0.3% and 1.4%, respectively, a day after Oracle unveiled a weak forecast.

Shares of the cloud company fell 1.2% after logging its biggest daily drop since January in the previous session.

"Investors are positioning for the next stage of the AI revolution, where end users begin to employ the technology and capture growth and productivity gains," said Kyle Rodda, a senior financial market analyst at Capital.com.

At 7:00 a.m. ET, Dow E-minis YMcv1 were up 59 points, or 0.12%, S&P 500 E-minis EScv1 were down 15.25 points, or 0.22%, Nasdaq 100 E-minis NQcv1 were down 162.25 points, or 0.63%.

Despite the gloomy overhang, the S&P 500 .SPX, the Dow .DJI and the Russell 2000 .RUT all closed at record highs on Thursday and were on track for weekly gains after the Fed trimmed borrowing costs and delivered a less hawkish outlook than investors had feared.

The biggest gains were in the blue-chip and small-cap indexes, underscoring a shift into value stocks away from the mega-cap names. The Russell 2000 has outpaced the S&P 500 for much of this quarter as investors rotate out of AI-fueled growth names and into value-heavy sectors such as healthcare .SPXHC.

"The move out of tech and into growth-sensitive sectors comes as investors try to put money into relatively cheap areas of the market likely to benefit from rate cuts," said Rodda.

Investors will be looking out for remarks from several policymakers later on Friday, such as Philadelphia Fed President Anna Paulson, Cleveland Fed President Beth Hammack and Chicago Fed President Austan Goolsbee.

Their comments on the economy and interest rates will be closely watched at a time when traders are pricing in a total of 50 basis points of rate cuts by the end of 2026 – more than the Fed signaled on Wednesday.

Key data next week include the Labor Department's non-farm payrolls report and the Consumer Price Index for the month of November.

Among others, Lululemon Athletica jumped 9.8% after the apparel maker said that CEO Calvin McDonald was leaving the company and raised its annual profit forecast.

U.S.-listed shares of cannabis companies rose after a report said President Donald Trump was looking to cut restrictions on marijuana through a planned order. Canopy Growth CGC.O added 20.3%, and Tilray Brands TLRY.O climbed 25.7%.