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Shares of Red Hat (RHT) - Get Red Hat, Inc. Report are up 5% and approaching its 52-week highs after the company beat on earnings per share and revenue expectations. 

The company showed "tremendous growth" in revenue and the stock is reacting favorably, TheStreet's Jim Cramer, co-manager of the Action Alerts PLUS portfolio, said on CNBC's "Mad Dash" segment. 

It's clear the migration to the cloud from on-premise data storage is still in the early innings, Cramer said, which is why Red Hat's growth accelerated. The same type of growth was seen in Adobe (ADBE) - Get Adobe Inc. Report and Oracle (ORCL) - Get Oracle Corporation Report . While Oracle's cloud business is gaining, it's on-premise legacy business does suffer though, he added.

A lot of investors were betting against Red Hat, arguing its growth had slowed. But management proved that's not the case. There are still a lot of companies out there that have yet to migrate to the cloud and that bodes well for Red Hat and its competitors, Cramer concluded. 

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At the time of publication, Cramer's Action Alerts PLUS had no position in companies mentioned.