Micron Technology, Inc. (MU) - Get Report and Lam Research Corporation (LRCX) - Get Report both had "unbelievably good quarters," TheStreet's founder Jim Cramer, who also manages the Action Alerts PLUS charitable trust portfolio, said on CNBC's "Stop Trading" segment, "but they could not break out."
Micron is a primary manufacturer of flash and DRAM prices, while Lam Research makes the equipment necessary for said production. HP Inc. (HPQ) - Get Report , which is doing "so well" right now, is worried about rising DRAM prices, while Cisco Systems (CSCO) - Get Report also recently said DRAM prices are moving higher, not lower, Cramer said.
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That's good news for Micron, not bad news, Cramer reasoned. He pointed out recent comments from Lam Research CEO Martin Anstice, who wanted to know why people think the DRAM supply/demand cycle is over with?
Despite the good results, though, both stocks have had trouble rallying. "If those two breakout to 52-week highs, those are the two that are going to trigger giant rallies in tech, including short-squeezes," Cramer explained, "that's what you want to watch."
If Micron and Lam Research can jumpstart a rally in hardware to go alongside the rallies in Salesforce.com (CRM) - Get Report , Adobe Systems (ADBE) - Get Report and other cloud players, it would be much more powerful than just FANG, Cramer reasoned. This could go beyond Facebook Inc (FB) - Get Report , Amazon.com, Inc. (AMZN) - Get Report , Netflix, Inc. (NFLX) - Get Report and Alphabet Inc. (GOOG) - Get Report(GOOGL) - Get Report .
Both of these stocks trade at a low earnings-based valuation and that's because investors think the earnings are falling apart. "I don't think they are," Cramer concluded.
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At the time of publication, Jim Cramer's Action Alerts PLUS had position in FB and GOOGL.