After Gap's Friday run, Cramer is more hopeful about the retail sector

• After earnings beats from Gap and Target this week, CNBC's Jim Cramer on Friday suggested retail stocks may be coming out a slump.
• "If Target and the Gap are truly leading the way, then we'll have a legitimate bull market on our hands, not just a tech bull market with a couple of the usual suspects thrown in," he said.

CNBC's Jim Cramer on Friday suggested big name retail stocks may be coming out of a slump following Gap's Friday earnings beat, which sent the stock surging more than 30%.

Cramer said he knows it's been difficult for even household names to see gains this year outside of tech outfits like Apple, Alphabet and Amazon. But Gap's quarter comes days after a positive report from Target, with the big-box retailer beating Wall Street's expectations and sending the stock up 18% by Wednesday's close.

"I mention this because, for most of my career, there was money to be made away from the most abstruse companies in tech," Cramer said. "This year, that's been very hard to do, but that may be changing after these terrific retail quarters."

Up nearly 60% year-to-date, Gap reported adjusted earnings of 59 cents per share, well over analysts' expectations of 19 center per share, according to LSEG. Gap's revenue came in at $3.77 billion, topping estimates of $3.60 billion. But despite its earnings success, the apparel retailer seemed cautious, reaffirming its full-year guidance and predicting flat or slightly negative sales during the holiday quarter.

Cramer conceded that investors have valid concerns about retail stocks: Consumers are still feeling the sting of inflation and high interest rates, and some may have less disposable income now that the pause on student loan payments has ended. He said he saw these factors as obstacles for most in the industry, but suggested circumstances may be changing after these solid retail quarters.

"If Target and the Gap are truly leading the way, then we'll have a legitimate bull market on our hands, not just a tech bull market with a couple of the usual suspects thrown in," he said.

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