Cramer's "Buy Hardware, Sell Software" Trade: LITE, COHR, AAOI, VIAV — And The Silicon Photonics Stock He Didn't Mention

Jim Cramer has a gift for crystallizing market sentiment into a soundbite. On Thursday's Mad Money, he delivered one: "buy hardware, sell software."

He marveled at the divergence playing out in real-time across AI infrastructure stocks. Marvell Technology (MRVL) and Intel (INTC) each gained nearly 5% on the session. Corning (GLW) rose nearly 3%. Meanwhile, Salesforce (CRM) is down 36% year-to-date. Adobe (ADBE) is down 34%. Even CrowdStrike (CRWD), a name that spent years wearing the "AI beneficiary" label, is down 16% on the year.

"If you're in the software camp," Cramer said, "you're being treated as if you're ready for the embalmer. If you are in the hardware and AI camp, you're headed for the pantheon of greatness."

NVIDIA Just Invested $2 Billion in Marvell — And what that could mean for the stock market today

That's a strong statement. It's also not wrong. The question worth asking — the one Cramer didn't get to — is which layer of hardware still has room, and where the market is still under-assigning value among AI data center stocks.

The answer, increasingly, is light.

The AI Data Center Optical Supercycle: Why Silicon Photonics Stocks Are The Hardware Trade Right Now

This isn't speculative framing. The infrastructure build driving everything Cramer pointed to on Thursday runs on photonics. At 800G and beyond, copper-based electrical interconnects physically cannot scale to the bandwidth and power density requirements of next-generation AI clusters. The industry isn't debating this. It's spending billions of dollars engineering around it — and the capital flows into optical networking stocks and silicon photonics stocks over the past 30 days make that unmistakably clear.

NVIDIA made it explicit in early March with a $2 billion strategic investment in Lumentum Holdings (LITE) and a separate $2 billion commitment to Coherent Corp. (COHR) — a direct endorsement of the optical infrastructure layer as the critical next phase of the AI buildout. Then, on April 1st, NVIDIA announced a third $2 billion investment, this one in Marvell Technology (MRVL), centered on NVLink Fusion and custom silicon accelerator integration. Three separate $2 billion checks in roughly 30 days. Jensen Huang, at GTC 2026, framed the optical direction plainly: "Are you going to scale up optical? Yes. Are you going to scale out optical? Yes."

That's not a hedge. That's a roadmap.

The optical infrastructure stocks that moved on this aren't obscure anymore. But it's worth laying out the stack, because the market is still pricing these names inconsistently — and the inconsistency creates opportunity.

LITE, COHR, AAOI, VIAV: The Optical Infrastructure Stocks Already Winning The AI Hardware Rotation

Lumentum Holdings (LITE) has become a different company than most investors who last looked at it a few years ago remember. NVIDIA's $2 billion strategic investment in Lumentum didn't land in a vacuum — it was a supply chain lock-in move, the kind hyperscalers make when they're worried about having enough of something critical. LITE is the continuous-wave (CW) laser supplier at the heart of silicon photonics architectures, and the NVIDIA relationship signals that the laser layer is strategic, not commoditized. Lumentum stock surged nearly 15% on a single session in early March and is being re-rated by the market as AI infrastructure, not components. Lumentum's backlog in optical circuit switches alone reportedly exceeded $400 million, with Q3 FY2026 revenue guidance implying over 85% year-over-year growth.

Coherent Corp. (COHR) is the volume anchor of the optical transceiver market, sitting at roughly 25% market share with fiscal 2025 revenue of $5.81 billion, up 23% year-over-year. Coherent stock is NVIDIA's named collaborator on silicon photonics for the Spectrum-X platform. The company has restructured its business over the past two years — divesting non-core segments to concentrate on the exact AI data center inflection point the market is now repricing. Coherent's data center segment hit $1.21 billion last quarter, up 34% year-over-year. TD Cowen carries a Buy rating and a $330 price target. This is not a niche photonics play anymore. COHR is a mainstream AI infrastructure stock trading like one.

Applied Optoelectronics (AAOI) has been the optical sector's high-voltage name — more volatile, more concentrated, and for investors who sized it right, more rewarding. Q4 2025 was a record quarter for Applied Optoelectronics: $134.27 million in revenue, up 33.9% year-over-year. Data center revenue specifically jumped to $74.88 million from $44.24 million a year prior. Full-year 2025 revenue came in at $455.72 million, up 82.75% year-over-year. As of Q4 2025 earnings, management guided Q1 2026 revenue to a range of $150–$165 million and projected full-year 2026 revenue could exceed $1 billion. AAOI's differentiated position in low-power optical (LPO) solutions has given it a niche in the AI data center optical stack that Microsoft, among others, has found compelling. The thesis here isn't complicated: the company is growing fast, and hyperscale capex keeps going up.

VIAVI Solutions (VIAV) is the optical infrastructure stock that gets skipped in most coverage because it doesn't make transceivers. What it does is arguably more durable: VIAVI is the test and measurement layer of the entire optical networking supply chain. Nobody deploys 800G or 1.6T AI data center infrastructure without validating it first. VIAVI Solutions came to OFC 2026 in Los Angeles with a full product suite designed specifically for the 1.6T transition — including the TestCenter D2 1.6T Appliance and a high-density OSFP 1.6T test platform that earned a 4.0 score from Lightwave Innovation Reviews. The toll-road model — architecture-agnostic, required regardless of which silicon photonics vendor wins the volume race — is a structural advantage that doesn't get talked about enough.

POET Technologies (POET): The Optical Infrastructure Stock Worth Adding To Your Watchlist?

Here's the thing about LITE, COHR, and AAOI operating as separate companies producing separate components: the current architecture of an AI optical system requires combining a laser source with a photonic integrated circuit (PIC) and packaging everything together in a way that maintains signal integrity, manages heat, and scales for high-volume manufacturing. That integration problem is the chokepoint of the co-packaged optics transition. And it's the chokepoint that a small-cap silicon photonics stock most investors have never heard of has spent years engineering a solution for.

POET Technologies (NASDAQ: POET) is built around one core platform — the POET Optical Interposer™ — a wafer-level assembly platform that integrates externally modulated lasers, modulators, photodetectors, and drive electronics into a single compact module using standard semiconductor manufacturing processes. The same foundry infrastructure that makes everything else in this AI data center stack. No exotic bonding steps requiring manual alignment. Components are passively assembled at wafer scale using standard pick-and-place semiconductor equipment. It's a silicon photonics integration architecture the broader industry has yet to replicate at commercial scale.

OFC Declares an Optical Supercycle — Photonics Repricing

The technical case for where POET Technologies fits in the optical infrastructure stack is more grounded than it might initially sound. Co-packaged optics (CPO) — the architecture the entire AI data center industry is converging on — embeds optical conversion directly onto the switch ASIC rather than in a separate pluggable module, reducing rack-level power consumption by up to 40% and improving bandwidth density sharply. To get there, you need a reliable way to integrate a laser source, modulator, photodetectors, and drive electronics at wafer scale. That's the integration problem POET's platform is built to solve — sitting at the conversion point where electrical signals become light, before anything reaches a transceiver or a rack-level step. Some coverage of the silicon photonics space has taken to describing the AI infrastructure stack as NVIDIA being the brain and Marvell the nervous system. The signal-to-light conversion layer — where POET operates — would be the synapse.

The partnership activity around POET Technologies stock has accelerated in a way that doesn't match its market visibility. In March 2026, POET announced a strategic collaboration with LITEON Technology — one of the world's leading optoelectronic component manufacturers — to jointly develop next-generation optical communication modules built on the POET Optical Interposer for CPO, AI systems, and high-bandwidth data center applications. Prototype timelines run through late 2026, with high-volume production targeted for 2027. That's the same production window the rest of the optical infrastructure sector is racing toward.

The Foxconn relationship is further evidence of how the ecosystem is forming around the interposer platform. Foxconn Interconnect Technology (FIT) — one of the world's largest manufacturers of interconnect technologies — selected POET's optical engines for its 800G and 1.6T pluggable transceiver modules, with POET supplying silicon photonics-based optical engines and FIT handling module design and delivery to hyperscale end customers. That relationship — with design work completed and module development underway — gives the interposer platform a path to manufacturing scale that most development-stage photonics companies don't reach until much later.

Then there's the Quantum Computing Inc. (QUBT) partnership: a joint development agreement to build 400G/lane thin-film lithium niobate (TFLN) modulator-based 3.2 Tbps optical engines. That's next-generation co-packaged optics architecture — the kind of specs that don't show up in today's production lines but define what 2028's AI data center infrastructure looks like.

The Optical Infrastructure Investment Question Worth Sitting With

Cramer's "buy hardware, sell software" call on Thursday wasn't really about MRVL and GLW specifically. It was about a structural shift in where value accrues in the AI stack — away from software multiples built on future optionality, toward physical AI data center infrastructure that the buildout requires right now, without substitution.

The optical infrastructure layer is the most capital-intensive, technically constrained, and capacity-limited segment of that buildout. LITE, COHR, AAOI, and VIAV are the silicon photonics and optical networking stocks that already have institutional ownership, analyst coverage, and a seat at the hyperscaler negotiating table.

POET Technologies is the name engineering the platform that could sit underneath all of them.

Whether POET stock is the right place to look — or whether 2027 production timelines and current revenue levels make it too early — is a question that may be worth doing the work on.