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

CNBC’s Jim Cramer on Monday offered three reasons why tech firms, including companies with strong balance sheets, are seeing pain in the stock market.

The “Mad Money” host, who is filming the show from San Francisco this week, reiterated his warning against unprofitable companies from earlier this year but acknowledged that even firms with strong financials have been feeling the heat.

He gave three reasons why this might be the case:

1. The strong U.S. dollar and the Europe energy crisis are making companies more frugal with their purchases. “The underlying companies make products that their clients can live without in an increasingly tough global economy,” Cramer said.
2. The Federal Reserve might want stocks down. The central bank needs inflation to come down by any means necessary, which means the market could get uglier, Cramer said.
3. The company’s individual performances could have been lacking. “I happen to think Adobe‘s a terrific company, but its business has been slowing,” he said.

Cramer added that the jury’s still out on whether tech will stay crushed, or if this is an opportunity to buy 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 said.