CNBC’s Jim Cramer said Thursday that one company’s disappointing results don’t necessarily indicate an industry-wide problem.
Stocks fell on Thursday, ending a three-day winning streak as investors digested a new wave of corporate earnings. of Dow Jones Industrial Average and S&P500 Each fell by 0.4%, but high-tech industries had the largest share. Nasdaq Composite It fell 1.4%. Mr. Kramer argued that investors were selling shares in disappointed peers too quickly, overlooking key differences between businesses and creating potential buying opportunities.
“My motto is to do your homework and find out what companies actually do,” the “Mad Money” host said. “That’s the only way to benefit from these short-term association guilt movements, which tend to resolve themselves.”
He cited cybersecurity as a prime example. fortinet’s Stocks fell after Wednesday’s underwhelming quarterly results. palo alto networks and cloud strikeHowever, Kramer argued that both competitors offer more comprehensive cybersecurity platforms. Unlike Fortinet, which focuses on hardware, Palo Alto and CrowdStrike offer a broader range of security products and services. Cramer said Fortinet is losing market share to both companies, suggesting Fortinet’s weakness reflects company-specific challenges rather than an industry-wide slowdown in demand.
“Their stock should be bought, not sold, because Fortinet’s weakness does not indicate a slowdown in cybersecurity, it just indicates that Fortinet itself is not doing well,” Cramer said.
He sees a similar disconnect in enterprise software. ServiceNow Some disappointment in Wednesday’s earnings weighed on other software-as-a-service stocks, including: working day and sales force. Workday specializes in human resources and finance software, while Salesforce provides customer relationship management tools and its Agentforce platform.
“I’m close to both Workday and Salesforce, and I can tell you that their weakness today has more to do with the weakness emanating from ServiceNow than it does with the companies themselves,” he said.
This pattern is also emerging elsewhere in technology. Kramer pointed out that of the alphabet Disappointing results on Wednesday night were a drag. microsoft Despite the software giant’s strong quarterly results. Similarly, samsung’s Thursday puts pressure on conservative outlook micron “Micron’s high-bandwidth memory book is much more powerful than Samsung’s, but it’s still a buy.”
“Some of these convictions are completely unreasonable,” he said.
Cramer’s Charitable Trust, a portfolio managed by CNBC’s Investment Club, owns shares in PANW, CRWD, CRM, GOOGL, MSFT, and MU.
