"Each day one came out and then another came out," Cramer said Thursday on "Squawk on the Street." "If they had all come out at once, the stock wouldn't have been pumped to where it was. It was a serial rollout of positives."
Best Buy shares tanked on Thursday after the company reported disappointing sales and revenue during the important holiday season, blaming losses on extreme discounts from rivals.
Cramer said the electronics retailer needs a "big reset," and that analysts erred in thinking the company could compete with online shopping outlets. He said the holidays were an "Amazon quarter."
(Read more: Best Buy plunges 30% on weak holiday report)
Best Buy hurt its bottom line by trying to compete with heavy discounts, Cramer said.
"This is just a sample of what happens when you get way too bullish ahead of the quarter," Cramer said. "Why did people start liking it versus Amazon? Because they cut prices dramatically, and they offered the lowest price. Well, it turns out when you offer the lowest price, you don't make as much money."
(Read more: Amazon's secret weapon (No, it's not drones)
In a conference call with Wall Street analysts, Best Buy CEO Hubert Joly tried to allay concerns about the weaker-than-expected holiday season.
"We've hit a speed bump," Joly said. "And we don't want to minimize it because frankly we care deeply about our month-to-month performance. But our sense is that it doesn't change the overall story. It doesn't change the long-term perspective."
(Read more: )
A bad holiday season makes for a hard recovery in the retail sector, especially for big-ticket electronic items, Cramer said. The months between holiday seasons are "humdrum" for retailers, he said.
"Without a doubt the momentum that Best Buy had is over, and I don't know whether you can recover," Cramer said. "You've got a four-month window ... I'm not going to Valentine's Day and buying anyone a 60-inch [TV] screen."
Disclosure: Cramer's charitable trust does not own shares of either Amazon or Best Buy.
—By CNBC's Jeff Morganteen. Follow him on Twitter at @jmorganteen and get the latest stories from "Squawk on the Street." Reuters contributed to this report.