Cramer: consider buying the dip in the beaten down tech stocks now

It’s time to consider buying the dip in some of the beaten down, high quality tech names because the Target news this morning suggests inflation is peaking, says the Mad Money host Jim Cramer.

Target to lower prices to get rid of excess inventory

On Tuesday, retail behemoth Target Corporation said it will resort to selling unwanted items at deep discounts to “right size” its inventory levels. Explaining what that means, Cramer said:

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When we see supply gluts developing, it means price cuts are on the way, it means inflation is coming down, it means Fed has a better chance of engineering that soft landing we so hope for if we’re bullish.

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

Cramer endorses three tech stocks in particular

The development, as per Cramer, might create some room for the U.S. central bank to be a bit less aggressive. Consequently, a few of the tech stocks will become attractive again, he added.

The real greenlight here is on the high quality, beaten down tech stocks. They might deserve a big of a 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 the Target news. Cramer, however, warned the CPI print later this week could just as easily reverse the aforementioned setup.