The stocks of cloud companies like New Relic and Twilio are ripe for buying after a brutal series of October sell-offs, CNBC's Jim Cramer said Wednesday.
October was the worst month for the broader technology sector since the depths of the financial crisis, with the tech-heavy Nasdaq Composite seeing its most drastic drop since November 2008.
"The cloud names rallied like crazy today and I think they've got more room to run," he said. "If anything, they might be the best tech stocks, other than, maybe, cybersecurity, ... to own from now until the end of the year."
Cramer consulted with Marc Chaikin, a famed technician who runs Chaikin Analytics and has invented numerous analytical tools, about the cloud stocks' potential, and Chaikin agreed.
When the cloud plays were in the throes of the October selling, Chaikin noticed that the Tick, a short-term indicator that measures buying and selling pressure during trading sessions, showed the highest level of concentrated selling in 40 years.
"That was pure panic, and the cloud was at the epicenter of the panic," Cramer said. "[Chaikin] said it was the momentum funds bailing, and once they were done bailing, you got your opportunity. I think that opportunity continues now that we have the evidence we need to prove that this business keeps accelerating."
That evidence lies in the cloud players' earnings reports, the "Mad Money" host said. New Relic, a company that manages website traffic for businesses in real time, said Tuesday that it was seeing accelerating growth.
Twilio's earnings results were dramatically better than expected, driven in part by business from Uber. Total annual recurring revenues at Tableau Software, which builds data analytics platforms for businesses, were up 45 percent year over year.
To top it off, semiconductor giant Advanced Micro Devices recently announced it would start selling its chips to Amazon, where demand for the cloud-focused Amazon Web Services arm is "growing like crazy," Cramer said.
"These ... software companies are all integral to the cloud, and their businesses are all accelerating," he continued. "The cloud sell-off turned out to be very wrong for one incredibly simple reason: the fundamentals."
WATCH: Cramer touts cloud plays as end-of-year winners
Disclosure: Cramer's charitable trust owns shares of Amazon.
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