Declines in some of the stock market's highest-flying technology stocks may have investors second-guessing, so CNBC's Jim Cramer took to the fundamentals to help explain the drops.
For example, recent talk of Apple's iPhone 8 sales being worse than expected has weighed on shares of Apple as well as its suppliers.
But Cramer said the worries were overblown, comparing the stock of Apple to legendary boxer Muhammad Ali, who inspired the term "GOAT," or "Greatest of All Time."
"Apple is GSOAT, the greatest stock of all time. Alright, it's no FANG, GSOAT, but come on, you get it," the "Mad Money" host said. "When you flit in and out of it based on rumors, just like betting against Ali, you'll most likely lose. Hey, you know, Ali had 56 wins, five losses, 37 knock-outs. By my count, Apple's got a much better record."
Overall, Cramer attributed the selling in top-performing tech stocks like Apple to mutual and hedge funds wanting to rake in solid quarterly profits, not critical problems at the companies.
"Let's ask ourselves, did these high-flying tech stocks get too expensive? You could argue that at various times, like Muhammad Ali, they're going to lose a few rounds. Hey, listen, every stock occasionally gets knocked to the darned canvas," Cramer said. "But then they're going to go back up, because there's no issues that I've been able to find involving the fundamentals."
Off the Charts With A Familiar Name
While the market may seem fairly steady, Cramer has noticed some major rotations swaying stocks below the surface as geopolitical tensions grow more strained.
"The truth is we're in unfamiliar territory here," the "Mad Money" host said. "While I'm pretty sanguine about the broader market, I can't blame anyone who wants to fall back on some nice, safe, steady-eddy companies with stocks that you can trust."
That's why Cramer turned to technician Tim Collins, his colleague at RealMoney.com, to see what could be ahead for old-line pharmaceutical giant Eli Lilly, a familiar stock with a solid track record.
Eli Lilly's daily chart doesn't exactly make the stock look stable, tracking its journey from July, when it was $84 a share, to mid-August, when it fell to $77. But shares have since climbed back to around $84, a rebound that Collins argues is part of a long term pattern.
VMware Exec Talks The New Hardware Economy
Twenty years ago, the hardware economy was responsible for massive hard drives and clunky PCs. But one VMware executive told CNBC that there's a new iteration at work.
As more and more companies turn to cloud-based solutions in order to cut costs and connect with an increasingly digital world, Sanjay Poonen, VMware's chief operating officer of customer operations, said many are embracing a hybrid approach to the new technology.
"As you think about companies and their future, they have to decide how much data center capacity they want to use now," Poonen told "Mad Money" host Jim Cramer on Tuesday. "Some people feel they run a data center very well. We can help them modernize it with software, and that's what we do very well. Some of the companies say, 'Listen, I don't want to expand a lot of my data centers. I want to use the new hardware economy.' If you talked about the hardware economy 20 years ago it was Dell, HP, IBM, Fujitsu, Cisco. The new hardware economy is not just those players, but [Amazon Web Services], [Microsoft] Azure, Google, IBM."
Red Hat CFO: Cloud Transformation
Red Hat CFO Eric Shander offered a similar sentiment to Poonen's in a Tuesday interview with Cramer, where he told the CNBC host that companies are blending cloud capabilities.
"Everybody's talking about it being a hybrid cloud world," Shander said. "I can tell you, whether it's on-premise, off-premise, they're looking for optionality, they're looking for multiple cloud providers, they're looking for flexibility."
After Red Hat, the leading provider of open-source software for enterprise in the world, issued a strong earnings report that topped Wall Street estimates, Shander highlighted a sea change in the cloud computing space.
The CFO said Red Hat has been investing in application development and emerging technologies, which made the software colossus $150 million in the latest fiscal quarter.
"Every single industry is transforming," the CFO told Cramer. "And not only that – there is an IT implication related to that. They're looking for agile development and that's where a lot of our technologies are helping enable that."
The Benefit of the Doubt
Finally, Cramer examined Carnival Corp. The cruise line's earnings withstood the expected harm of a stronger-than-expected hurricane season, and the "Mad Money" host had an idea why.
"The most valuable currency in this business isn't dollars. It's not gold. It's not even bitcoin. It's the benefit of the doubt. When the market realizes that a CEO deserves it, their stock tends to catch fire," Cramer said, pointing to Carnival CEO Arnold Donald. "If there's one thing we can bank on, it's that he's not going to be tripped up by some storms, even really bad ones."
Cramer pointed to Donald's handling of the Costa Concordia catastrophe, which resulted in 32 deaths, as well as the Zika and Ebola crises.
"Donald seems ready for any disaster and he always seems to have a back-up plan," Cramer said. "In fact, Donald raised the low end of his forecast DESPITE the hurricane damage and actually indicated that there was only a 1 percent cancellation rate. People are just lining up to go on these things. In short, the recent weakness? Another chance to buy."
Lightning Round: Flying & Charging
In Cramer's lightning round, he flew through his take on some callers' favorite stocks:
Southwest Airlines/Spirit Airlines: "Not a fan of Spirit. [I] think that LUV, which is the symbol for Southwest Air, is the best. [I] tell ActionAlerts members all the time, 'Listen, there is nothing like the stock of Southwest Air in that group.'"
General Electric Company: "I'm very impressed with what [CEO John] Flannery's doing. Why? Because he's already taking action. He's not waiting until November. He's taking action now. I think there's like $2 down and $3 up. I know, nobody's perfect, but I'm holding it for my charitable trust."
Disclosure: Cramer's charitable trust owns shares of Apple, Eli Lilly, Southwest Airlines and General Electric.
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