Wall Street is crazy for punishing Home Depot for a great quarterly earnings report, CNBC's Jim Cramer argued on Tuesday.

"Home Depot was not dead," Cramer said on "Squawk on the Street" as the Dow component was falling sharply.

For Advanced Auto Parts to be up so strongly "on a very small comp beat and Home Depot to be down?" Cramer asked.

That's "absurd," he argued.

Before the bell on Tuesday, Home Depot reported third-quarter earnings that beat analyst expectations. The home improvement giant also raised its full-year sales outlook.

Initially, in premarket trading, Home Depot was jumping higher, prompting Cramer's early morning tweet about whether the stock could help reverse Monday's more than 600-point drop in the Dow Jones Industrial Average.

Can a strong $HD save us? Or will the president set us back at some point today by attacking somebody, anybody

However, shares of Home Depot opened about 1 percent lower and more than doubled that decline.

Cramer, whose charitable trust does not own shares of Home Depot, has said he prefers that home improvement retailer over rival Lowe's because of what he called generally better earnings results, same-store sales, and growth.