consider buying down on losing tech stocks today

It’s time to consider buying some of the defeated, high-quality technology names because this morning’s Target news suggests that inflation is rising, says Mad Money host Jim Cramer.

Target to lower prices to eliminate excess inventory

On Tuesday, retail behemoth Target Corporation said it would sell unwanted items at deep discounts at the “right size” of its inventory levels. Explaining what this means, Cramer said:

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When we see supply growth, it means that price cuts are coming, it means inflation is going down, it means the Fed has a better chance of engineering the soft landing that we can expect if we is bullish.

Target’s announcement also pushed the 10 -year low of 3.0% on Tuesday. Signs of inflation peaking are also appearing in semiconductors, shipping, and fertilizers.

Cramer endorses three tech stocks in particular

The development, like every Cramer, could create some room for the U.S. central bank to be less aggressive. As a result, some of the tech stocks will be attractive again, he added.

The real greenlight here is in high quality, defeated by tech stocks. They may deserve a big resurgence if they are profitable, if they have buybacks, and dividends; names like Broadcom, ServiceNow, and Salesforce.

The tech-heavy Nasdaq composite closed nearly 1.0% up on Target news. However, Cramer warned the CPI print later this week could be as easy as reversing the aforementioned setup.

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