Jim Cramer said Wall Street is indiscriminately selling even competitive companies as weak results at some tech firms are being read as a broader sign of weakness across their industries. He said investment behavior that fails to distinguish earnings and business structures by company could instead create chances to buy undervalued stocks.

On Oct. 29 local time, CNBC reported that Cramer said the recent correction in tech stocks is failing to properly reflect differences in earnings and business structures across companies.

U.S. stocks fell on the day, ending a run of gains over the past 3 sessions. The Dow Jones Industrial Average and the S&P 500 each fell 0.4 percent, while the tech-heavy Nasdaq Composite slid 1.4 percent. Cramer said that as earnings reports continue, investors are selling not only companies that posted weak results but also their competitors in the same sector.

“My motto is to do the work and know what a company actually does,” he said. “That’s how you find opportunities in short-term guilt-by-association moves.” He said the phenomenon in which one company’s weak earnings drags down competitors’ shares is generally corrected over time.

He cited cybersecurity as a representative example. After Fortinet failed to meet market expectations in quarterly results released on Oct. 28, shares of Palo Alto Networks and CrowdStrike also wobbled. Cramer said their business structures differ from Fortinet’s.

He said Fortinet runs a hardware-centered business, while Palo Alto Networks and CrowdStrike provide broader cybersecurity platforms and services. Cramer also said Fortinet is losing market share to the two rivals. He argued that Fortinet’s weak results should be seen as a company competitiveness issue rather than a sign of slowing demand across the cybersecurity sector.

“These stocks should be bought, not sold,” he said. “Fortinet’s weakness is not a signal that the cybersecurity market is slowing, but only that Fortinet itself is not doing well.”

A similar pattern appeared in enterprise software. After ServiceNow left the market somewhat disappointed in its earnings release on Oct. 28, shares of software-as-a-service firms including Workday and Salesforce also weakened.

Cramer said investors need to distinguish these companies’ business areas and competitiveness. He said Workday has strengths in human resources and finance software, while Salesforce has strengths in customer relationship management tools and the Agentforce platform, making it hard to judge their business outlooks the same way based only on ServiceNow’s results.

He said the day’s declines in Workday and Salesforce were driven more by spillover weakness from ServiceNow than by company-specific problems. Shares moved together simply because they are in the same sector, but differences in business structures and earnings were not sufficiently reflected, he said.

Cramer said similar synchronized selling also appeared in other tech sectors. He said that after Alphabet’s results released after the close on Oct. 28 missed market expectations, even Microsoft shares came under downward pressure despite strong quarterly results.

In semiconductors, he said Samsung Electronics’ conservative outlook on Oct. 29 also weighed on Micron shares. Cramer said Micron’s high-bandwidth memory order situation is much stronger than Samsung Electronics’, and he did not see it as appropriate to lump the two together and sell them by the same standard.

“Some of these guilty verdicts are absurd,” Cramer said. He said tech stocks broadly are being shaken by earnings-season volatility, but investors should assess individual companies’ results and business competitiveness rather than judging an entire sector as one.

He said his argument offers a standard investors should watch during a tech-stock correction. He said one company’s weak results can affect rivals, but selling companies with different earnings and business outlooks can instead create investment opportunities.