CNBC’s Jim Cramer on Monday offered three reasons why tech companies, including companies with strong balance sheets, are seeing pain in the stock market.
The “Mad Money” host, who is taping his show from San Francisco this week, reiterated his caution against for-profit companies earlier this year, but acknowledged that even financially sound firms are feeling the heat.
He cites three reasons why this might be the case.
- The strong US dollar and the European energy crisis are causing companies to be more frugal with their purchases. “Foundational companies develop products that customers can rely on in an increasingly difficult global economy,” Cramer said.
- The Federal Reserve may want to lower stocks. Cramer said the central bank wants inflation to come down at any cost.
- Individual performances of the company may be lacking. “I happen to think Adobe is a great company, but the business is declining,” he said.
Cramer added that the jury is still out on whether the technology will remain underpowered or if this is an opportunity to buy dips.
“But has the sell-off gone too far or is this simply a nightmare that won’t end anytime soon? I mean, that’s the question.”
