Jim Cramer Sells Broadcom Holdings While Defending Nvidia

CNBC host Jim Cramer sold his charitable trust's holdings in Broadcom Inc. following reports that the chipmaker plans to raise up to $80 billion in debt to support a chip financing deal. Cramer cited these leverage risks as the primary driver for his exit from the company.

While criticizing Broadcom's debt strategy, Cramer defended Nvidia Corporation against accusations of engaging in circular deals, which he described as "lazy Susan deals." He argued that Nvidia's financial position is fundamentally different due to its $49 billion in free cash flow and superior balance sheet, which allow the company to fund operations and share repurchases without relying on bond markets.

This financial divergence comes as Nvidia prepares to report earnings. Investors are closely monitoring the company's free cash flow and supply commitments to determine if it can sustain its ecosystem investments without incurring the leverage risks seen at Broadcom. CEO Jensen Huang has previously characterized Nvidia as the platform of the current era.