"Yep, in recent months, both GoPro, the maker of wearable, high-definition video cameras, and Fitbit, the king of wearable fitness trackers, have seen their stocks begin to quietly work their way higher. GoPro vaulted 32 percent since it bottomed in March, while FitBit's gained roughly 24 percent since its all-time lows in June," the "Mad Money" host said.
Cramer was curious about what brought the humbled hardware stocks back into Wall Street's favor, so he looked back on their respective trajectories for insight.
GoPro came public at $24 a share in 2014 and rallied to $98 after its first earnings report, but right after the stock's peak, news broke that its founder was selling 5.8 million shares — an unnerving move that suggested he lacked confidence in his company's stock and amounted to a breach of shareholder trust.
After that, GoPro slowly lost steam. Weak product launches, slowing growth and sub-par 2015 and 2016 holiday sales drove the stock down to just over $7. But since then, GoPro has started to come back.
Fitbit's stock took a similar path. After coming public for $20 a share in 2015, Fitbit shares had climbed to $50 within two months. But after its first earnings report, the stock got slammed on far-too-inflated expectations, Cramer said.
Fitbit shares then spent some time between the $30s and $40s, but by early 2016, slashed guidance, overlooked products and mass analyst downgrades drove its stock into the single digits. Still, after settling at $4.90 in late June, Fitbit's shares have also started to rebound.
"So what's behind these runs? Can they be sustained? Can you own either [stock] into next week's earnings reports? Well, I think you've got to to take them case by case, because GoPro looks like it might actually be turning. Things are still murky at Fitbit," Cramer said.
Since GoPro's shares bottomed in March, management has announced a string of restructuring initiatives, starting with layoffs and cost cuts.
GoPro has also been diversifying away from wearable cameras and into recreational drones, which has proved successful: last quarter, GoPro had the second-best-selling drone brand in the United States.
"Crucially, though, GoPro has realized that software in these devices matters a whole lot more than the hardware," Cramer said. "Their software platform, sometimes called an ecosystem, improved dramatically in recent months, including their QuikStories App, which makes it much easier to edit your videos so you can share them on Instagram or Snapchat."
Sure enough, GoPro caught a wave of analyst upgrades, mostly to "hold" from "sell." And, with the stock down on some profit-taking, Cramer said it could be a bargain buy before earnings.
Fitbit's recovery has been more short-lived, but improving earnings and takeover rumors have driven the stock back to palatable levels, Cramer said. While he wasn't ready to back the stock yet, the "Mad Money" host liked the sound of the company's guidance and coaching service, which creates data-specific fitness regimens for users for $7.99 a month.
"Here's the bottom line: in this market, even the doggiest dogs can have their day. I think GoPro has really turned things around here. I wouldn't be averse to putting on a small position before the quarter. But Fitbit? I think it still has a lot of wood to chop, so to speak," Cramer concluded.