The Trump administration's proposal to counter the economic impact of the coronavirus outbreak could create buying opportunities in the technology sector, CNBC's Jim Cramer said Tuesday.
In a stock market that has buckled to the fast-spreading COVID-19, Cramer added tech stocks that are immune to cyclical changes in the economy to his list of stocks that can be bought in this volatile market environment.
"That's why I always eye the fastest-growing tech stocks in a slowdown. They bounce back quickly and often become leaders for the next leg up," the "Mad Money" host said. "We'll get that leg ... when we cure or contain COVID-19, even if their earnings could be a tad shy. The stocks are certainly down."
In the cloud cohort, Cramer recommended Adobe, Salesforce, Microsoft and ServiceNow as plays. These businesses are being fueled by the digital transformation. Of the FAANG group, the stocks of Alphabet and Amazon are on his list and he called Facebook "intriguing."
An investment in these secular growth names is a bet that they will continue growing, despite the pain that the broader market is experiencing, he said.
"These kinds of high-growth names do tend to outperform in a recession because they're riding powerful long-term themes that keep working even in a weaker economy," the host explained.
Earlier Tuesday, President Donald Trump floated the idea of cutting the payroll tax rate to 0% for employers and employees for the rest of the year as an economic stimulus to counter effects of the coronavirus outbreak. Among other measures, the White House is considering action to help small businesses and make way for paid sick leave for workers. Trump discussed these plans in a meeting with Republican lawmakers.
Cramer, who has grown critical of the administration's handling of the outbreak, said it's a sign that the president is "hoping for the best" while "planning for the worst, at least on the economic side of things." He reminded "Mad Money" viewers, however, that the moves — if approved — will not solve the public health crisis.
"Most of these plans, they only address the knock-on effects. This stimulus is not a reason to go buy the stocks that are in a blast zone like a Carnival or American Airlines or Darden, the parent of Olive Garden," the host said. "You never want to own these stocks going into a slowdown, let alone a possible recession."
Cramer continued to highlight pharmaceutical and utility stocks with appropriate yields as worthy buys.
Pharmaceutical stocks can benefit from a low interest rate environment and one where investors are growing concerned about a pending economic recession, he said. Drug stocks, such as AbbVie, that yield more than 3% are worth buying, he noted.
The same applies to the utility industry. Stocks that pay a dividend yield higher than 3% can be picked up. Cramer recommended American Electric Power, Consolidated Edison, Dominion Energy and Southern Company for their growth potential.
"Until today, I'd been adamant the only thing you could buy were high-yielding pharma and a handful of utilities," he said. "Now we're further along and you've got my blessing to buy the tech stocks with powerful secular growth stories. We're stuck in a deflationary cul de sac here, and that's when tech totally shines."
Disclosure: Cramer's charitable trust owns shares of Amazon, Alphabet, AbbVie, Facebook, Microsoft and Salesforce.