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Cramer: How deep the Apple pain goes

Jim Cramer sees more than one way for investors to win in the market right now. However, there is one way to lose and that is with owning technology, or specifically, the FANG house of pain.

"I see so many more ways to win than lose, but I will go right to what's losing because the winning companies are a lot smaller and diverse than the losers," the "Mad Money" host said,

Apple reported earnings on Tuesday, which prompted the stock to fall more than 8 percent in after-hours trading. Cramer considered the numbers to be just OK, with some decent highlights that included an accelerating service revenue stream stronger than expected and some good data on new adoption.

With this in mind, Cramer added that Apple is now suffering from the hangover of strong sales last year, which has now extended to the once-red-hot Asian market.

A customer uses her smartphone at an Apple store in Shanghai.
Johannes Eisele | AFP | Getty Images
A customer uses her smartphone at an Apple store in Shanghai.
"I have been saying the outlook will be tough. It was that, and then some." -Jim Cramer

"In some ways even Apple misjudged how truly strong its cellphone sales were, and it is hitting a reset button. A reset down, as estimates for both phones and earnings are going to come down hard tomorrow," Cramer said.

While there was a cushion to the earnings with the announcement of a dividend boost and a buyback, Cramer thinks many investors may give up on Apple and assume it is a one-trick pony.

"I have been saying the outlook will be tough. It was that, and then some," he added.

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Cramer expects the pain from Apple to reverberate through the entire tech cohort on Wednesday, especially the stocks that did not go down when Alphabet reported. This includes Twitter, which provided a downbeat forecast on Tuesday.

"I want to own Apple for the iPhone 7. Not changing my long-term view," Cramer said.

However, Cramer still found many ways to win in the current market environment, especially for oil.

Pioneer Natural Resources reported a strong company, which prompted the stock to rise 7 percent Tuesday to $165. In the beginning of the year, Pioneer conducted a secondary offering at $117.

"If Pioneer has that kind of opportunity, then I suggest you look at Concho Resources and Cimarex Energy, which both have similar prospects and both, like Pioneer, have already done stock deals to raise capital," Cramer said.

Cramer also pointed to the bank stocks as possible opportunity, especially as he thinks there could be a consolidation coming for the group.

Ultimately, with so many ways to win, Cramer won't just focus on Apple and technology. Not when there are so many opportunities out there thanks to rebounding commodity prices, rising defense budgets, takeovers and a weaker dollar.

"I say let's stay positive even as we know that a portion of our portfolio remains in the house of pain," Cramer said.

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