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Jim Cramer: There Are Too Many Software as a Service Companies

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Jim Cramer has a warning for investors. 

He believes that there needs to be consolidation in both the cybersecurity and Software as a Service (SaaS) sectors.

"Salesforce (CRM) last quarter was very good. By the way, the ServiceNow (NOW) quarter wasn't bad...Splunk (SPLK) had a very good quarter. Workday (WDAY) said some things that were negative, and that really accelerated the downturn. I think that this group is one that trades together like in 2000, but it's much better. And those had no earnings and many of them were corrupt. These are all good companies. You need to see Okta (OKTA) bottom. You need to see CrowdStrike (CRWD) bottom, you need to see ZScaler (ZS) bottom. You need to see the cybersecurity stocks, in general, bottom. There's too many of those. There's too many software as a service companies. You need to see a bit of a shakeout, maybe some mergers, and then you can get a bottom. But in 2000, the bottom took a long time," said Jim Cramer.

Watch the full clip above. 

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