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Jim Cramer: This is how you have a tech rally

When cloud computing meets old-fashioned tech, that's when a rally can occur, CNBC's Jim Cramer said on "Squawk on the Street" on Tuesday.

"Watch tech — that's where the action is," Cramer said. "Watch FANG [Facebook, Amazon, Netflix and Google], and watch old tech."

Shares of Western Digital popped nearly 4 percent Tuesday morning as investors await a Thursday conference call. The call is expected to provide guidance for the fiscal quarter ending in July, now that Western Digital has completed its acquisition of SanDisk.

"There's two kinds of tech: There's the tech that is cloud-related — SanDisk, which was bought by Western Digital, has a bit of a cloud component — and then there's Western Digital, with Seagate, and Intel and Microsoft."

While some consumer technology companies, such as Twitter, were punished by Wall Street on Tuesday, Western Digital's bounce comes after semiconductor company Applied Materials and cloud and software company Microsoft have both seen positive commentary from analysts. Indeed, Cramer called Microsoft the "next stock to rock and roll."

"A lot of good news in tech," Cramer said. "Let's see if it percolates."

Disclosure: Cramer's trust owns shares of NXP Semiconductors, Facebook, Apple, Alphabet, Twitter and Cisco.