Cramer greenlights beaten-down tech stocks, says Target’s inventory woes suggest inflation is peaking

CNBC’s Jim Cramer on Tuesday gave investors his blessing to consider purchasing beaten-down tech stocks after Target’s latest quarter indicated good news for the Federal Reserve’s fight against inflation.

“The real greenlight here is on the beaten-down tech. … They might deserve a bit of a resurgence if they have profits and a total romp if they have buybacks and dividends,” he said.

“This is not a subtle market. I don’t want you to overthink it because sometimes it can be easy,” he added.

Cramer’s comments come after Target said in its latest quarter that it will need to shed its excess inventory, which will in turn constrain the company’s profits. 

The “Mad Money” host, who the day before advised investors to buy the dip only on oil stocks, said that Target’s news suggests that inflation is peaking. This opens up the door for investors to buy stocks that were previously untouchable in a high interest rate environment, he said. 

Listing ServiceNow, Broadcom and Salesforce as names that are more attractive after Target’s news, Cramer said he’s still staying away from retail stocks short-term.

He also warned investors that this change in the market could go away as fast as it came, due to the economy’s volatility.

“Of course, this market’s so darned fickle that this whole move could reverse when we get the big consumer price index number at the end of the week. … That could drive long-term interest rates higher again, putting this whole move on ice,” he said.

Disclosure: Cramer’s Charitable Trust owns shares of Salesforce.