Jim Cramer’s 3 reasons why profitable tech stocks are getting hit

CNBC’s Jim Cramer on Monday supplied three reasons why tech corporations, together with corporations with sturdy steadiness sheets, are seeing ache within the inventory market.

The “Mad Money” host, who’s filming the present from San Francisco this week, reiterated his warning in opposition to unprofitable corporations from earlier this 12 months however acknowledged that even corporations with sturdy financials have been feeling the warmth.

He gave three reasons why this is perhaps the case:

  1. The sturdy U.S. greenback and the Europe power disaster are making corporations extra frugal with their purchases. “The underlying companies make products that their clients can live without in an increasingly tough global economy,” Cramer mentioned.
  2. The Federal Reserve may need stocks down. The central financial institution wants inflation to return down by any means needed, which suggests the market might get uglier, Cramer mentioned.
  3. The firm’s particular person performances might have been missing. “I happen to think Adobe’s a terrific company, but its business has been slowing,” he mentioned.

Cramer added that the jury’s nonetheless out on whether or not tech will keep crushed, or if this is a chance to purchase the dip.

“Has the sell-off gone too far, though, or is this simply a rolling nightmare that’s not going to end anytime soon? I mean, that’s the question,” he mentioned.

Jim Cramer gives his take on the state of tech stocks

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