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Cramer explains what the Fed's rate cuts mean for tech stocks

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Big Tech and its peers are focused on AI automation that will boost companies’ earnings and allow them to perform more work with fewer workers, he said.

CNBC's Jim Cramer said the Federal Reserve's interest rate cuts hinder tech stocks because the companies don't necessarily stand to benefit from lower rates.

"With a double-sized rate cut that everybody already expected, you aren't gonna see a huge run in tech. It doesn't have the edge when we get the big cuts," he said."Right now, the Fed's helping companies that need a healthy consumer or else.

Consumer-oriented companies may be the ones to own during this cutting cycle, Cramer suggested, even though tech stocks can still be winners with rates coming down. According to Cramer, Wall Street abandons these secular stocks for ones that rely on lower rates, and there's only"so much cash to go around." He added that investors make a distinction between companies that do well most of the time and ones that can perform extremely well during certain points in the business cycle.

"On days like today, we want the companies that desperately needed a rate cut, because they just got what they wished for," Cramer said."But tech? It got out of the wish game a very long time ago."Sign up nowSiemens USA CEO explains how digital twins work to optimize manufacturing

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