Initially shares sold off in the after-hours, but rallied on Friday as investors seemingly changed their minds on the results. Cramer said that it's a flat-out "mistake" to be short Pandora, which has such solid growth.
He added that many market participants assumed Apple's (AAPL) iRadio would crush Pandora, but that's not the case. AAPL is a holding in Cramer's charitable trust, Action Alerts PLUS.
Cramer also said that if Spotify gets a high valuation -- which he thinks it will -- then Pandora should go higher.
Turning to Gap (GPS), shares are lower following its earnings report Thursday. According to Cramer, investors were disappointed after the retailer crushed sales estimates for the month for October but then followed with a dismal earnings report.
Finally, The Fresh Market (TFM) is falling Friday, and Cramer said investors should be cautious of the chain grocer because of its issues in expanding from a regional operation to a national operation.
He concluded that investors should instead look to buy dips in Whole Foods Market (WFM).
-- Written by Bret Kenwell in Petoskey, Mich.