# AI Data Center and Cybersecurity Stocks Market Outlook

**Published:** 2026-08-21T19:30:52.673Z  
**Topic:** S P 500  
**Sentiment:** neutral  
**Publisher:** TrendWatcher — https://www.trendwatcher.in/article/de8dd5bc-27d0-4f47-a2a9-04f7c0f0c000

Jim Cramer highlights Lumentum, Coherent, CrowdStrike, and Palo Alto as AI infrastructure plays. See the latest revenue growth and performance data here.

Jim Cramer is steering investors toward established AI infrastructure providers, favoring companies with proven backlogs and earnings growth over speculative small-cap photonics firms [1]. This shift in focus underscores a broader market trend where investors are prioritizing companies with tangible revenue streams from hyperscaler AI spending over unproven growth stories [1].

| At a glance | |
|---|---|
| Lumentum Q2 Revenue | $665.5 million |
| Lumentum Revenue Growth | 66% year-over-year |
| Coherent Q2 Revenue | $1.686 billion |
| Coherent Revenue Growth | 18% year-over-year |

## Photonics and AI Infrastructure
Cramer’s preference for Lumentum Holdings and Coherent centers on their demonstrated ability to execute within the AI data center supply chain [1]. Lumentum reported Q2 fiscal 2026 revenue of $665.5 million, a 66% increase compared to the prior year, while non-GAAP EPS of $1.67 outperformed the $1.4085 consensus estimate by 19% [1]. The company’s non-GAAP operating margin expanded by 1,730 basis points year-over-year to 25% [1]. Lumentum’s growth is supported by an optical circuit switch backlog exceeding $400 million and a new multi-hundred-million-dollar order for co-packaged optics [1].

Coherent, which operates at a larger scale, reported Q2 fiscal 2026 revenue of $1.686 billion, beating analyst estimates by 3% [1]. Its datacenter and communications segment grew 34% year-over-year to $1.208 billion, now accounting for approximately 72% of the company's total revenue [1]. Shares of Lumentum and Coherent have risen 143% and 84.38% year-to-date, respectively, reflecting strong investor demand for companies with verified order pipelines tied to hyperscaler infrastructure [1].

## Cybersecurity Growth Trends
Beyond hardware, Cramer maintains a bullish outlook on cybersecurity leaders CrowdStrike and Palo Alto, arguing that the expanding threat landscape and cloud migration necessitate increased corporate spending [2]. Despite earlier concerns that AI might disrupt software business models, the sector has rebounded as Wall Street increasingly views AI as a driver for security demand [2]. CrowdStrike and Palo Alto shares have climbed 84% and 106% year-to-date, respectively [2]. 

Cramer attributes this performance to "exploding" earnings, which he suggests justifies higher price-to-earnings ratios [2]. TD Cowen recently raised its price targets for both firms, citing strong demand fueled by AI, while maintaining buy ratings [2]. Cramer specifically noted that CrowdStrike remains only 15% penetrated in its cloud-native market, suggesting a long runway for growth despite the significant year-to-date rally [2].

## What to watch
*   **Lumentum Q3 Guidance:** Monitor the company’s ability to hit its projected revenue range of $780 million to $830 million and its target non-GAAP operating margin of 30% to 31% [1].
*   **Coherent Production Capacity:** Watch for updates on the company’s production capacity expansion, which management expects to drive growth throughout the remainder of fiscal 2026 and into 2027 [1].
*   **Cybersecurity Penetration:** Observe whether CrowdStrike and Palo Alto can maintain their current growth trajectories as they expand their cloud-native security offerings against a backdrop of rising digital threats [2].

The market’s current focus on these names suggests that investors are increasingly filtering for companies that can demonstrate direct financial participation in the AI build-out. Whether these valuations can continue to expand depends on the ability of these firms to convert their multi-hundred-million-dollar backlogs and security demand into sustained, high-margin earnings growth [1, 2].

## Sources
1. 24/7 Wall St. — [Jim Cramer Says Skip Poet and Buy These 2 Proven Photonics Stocks for AI Data Centers in August](https://247wallst.com/investing/2026/08/13/jim-cramer-says-skip-poet-and-buy-these-2-proven-photonics-stocks-for-ai-data-centers-in-august/)
2. CNBC — [Jim Cramer says these 2 cybersecurity stocks can keep climbing as AI threats grow](https://www.cnbc.com/2026/08/17/cramer-2-cybersecurity-stocks-can-keep-climbing-as-ai-threats-grow.html)
3. CNBC on MSN — [Some of the data center stocks are buying huge amounts of stock in the open markets, says Jim Cramer](https://www.msn.com/en-us/video/other/some-of-the-data-center-stocks-are-buying-huge-amounts-of-stock-in-the-open-markets-says-jim-cramer/vi-AA2akEZ9?ocid=BingNewsVerp)

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Cite as: TrendWatcher, "AI Data Center and Cybersecurity Stocks Market Outlook", https://www.trendwatcher.in/article/de8dd5bc-27d0-4f47-a2a9-04f7c0f0c000