Shares of Red Hat (RHT) - Get 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 Report and Oracle (ORCL) - Get 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. 

Image placeholder title

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