Cramer’s comments precede a busy earnings schedule next week, with tech giants Apple, Facebook and Google-parent Alphabet all expected to report. Ecommerce giant Amazon is also expected to report.
All of this will take place against the backdrop of this week’s reports from Microsoft and Tesla, both of which have come under selling pressure following the release of their quarterly figures, Cramer said. A similar situation has occurred for Netflix, he added.
“All of these Big Tech titles are trading together, and when you kick off the earnings season with such underwhelming action, well, that doesn’t bode well for the rest of the group,” Cramer said.
But Cramer said long-term investors in those stocks shouldn’t be overly concerned about any potential sell-off of those stocks. They may just arrive in the neighborhood “too hot”, he said. Additionally, he said, CEOs of Apple, Google, Amazon, and Facebook are expected to testify before Congress early next week.
Wall Street reacted badly to Netflix’s quarter, mainly due to weak forecasts for new subscribers, Cramer said. Some analysts have expressed concerns about Microsoft’s Windows forecast, he said, while others have spoken of Tesla’s revenue from the sale of regulatory carbon credits to other automakers. .
Whatever qualms may have contributed to these two stocks coming under downward pressure, Cramer said he didn’t think they understood that the companies had a fundamental problem.
“The action has gotten too hot right now. The fundamentals have nothing to do with this sale, ”said Cramer. “Unfortunately, they had nothing to do with the last 10 to 15 percentage points of increase, which is why [these] names are so vulnerable. ”
Disclosure: Cramer charitable trust owns shares of Apple, Amazon, Facebook and Alphabet.