Look out below! Shares of Skyworks Solutions (SWKS) are struggling Tuesday, down about 6.7% to $108 in early trading.
The stock's fall comes despite the company beating on earnings per share and revenue expectations. Guidance for next quarter was in-line with expectations.
So what's up with Skyworks stock? Because guidance did not exceed expectations, investors are selling off the stock, TheStreet's Jim Cramer said on CNBC's "Mad Dash" segment. "I think that's nonsense," he added.
Skyworks does a "huge amount of business" with Apple (AAPL) , and because its new iPhones are supply constrained, it is keeping pressure on some of the suppliers, like Skyworks, Cramer explained.
Management can't increase guidance significantly without knowing exactly what Apple is going to do. "You're a fool" if you think this business is going to suddenly suffer a big decline, he reasoned.
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It's a double-edged sword, though, because Apple doesn't like its suppliers talking about it or its business. It's like Fight Club, Cramer said in reference to the popular 1999 film.
"The first rule of being an Apple supplier, is you don't talk about Apple," said Cramer, who also manages the Action Alerts PLUS charitable trust portfolio.
Skyworks was stuck in a catch-22, either being hurt by short-term investors by not providing better guidance or possibly pinched by Apple for giving too many clues about its business. This pullback is "an opportunity to buy the stock," Cramer concluded of Skyworks Solutions.
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