In this article, we will look at Jim Cramer’s latest stock calls, as he suggested investors balance portfolios with hot and cold stocks. The host of Mad Money said Thursday that investors should stop chasing only the market’s hottest trades and instead pay attention to areas that have fallen out of favor, specifically healthcare stocks.

We know that certain parts of this market are as hot as a just-fired pistol. Tonight, though, I want to praise the other parts of the market, the parts that have been marked down already, which makes them less vulnerable to surprises. And I’m talking about healthcare, a group that used to represent safety, always has some growth, but is now considered poison… I like value, especially when it’s attached to a growth industry like healthcare.

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Questioning how investors can shield portfolios from sharp downturns, Cramer suggested that rather than chasing momentum, investors should buy stocks that have already taken significant hits, describing them as “pulverized” and heavily sold off despite representing strong underlying businesses. He said that healthcare fits the description and offers an opportunity for those willing to look past current sentiment.

Bottom line: I think these quality healthcare names help to balance out your portfolio right now, giving you something that can’t be savaged by AI displacement that I can tell. Good balance, something tells me you’re going to need it.

Our Methodology

For this article, we compiled a list of 21 stocks that were discussed by Jim Cramer during the episode of Mad Money aired on April 23. We listed the stocks in the order that Cramer mentioned them.

Why are we interested in the stocks that hedge funds pile into? The reason is simple: our research has shown that we can outperform the market by imitating the top stock picks of the best hedge funds. Our quarterly newsletter’s strategy selects 14 small-cap and large-cap stocks every quarter and has returned 498.7% since May 2014, beating its benchmark by 303 percentage points (see more details here).

Jim Cramer Highlighted 21 Stocks, Including Dow and Home Depot

21. POET Technologies Inc. (NASDAQ:POET)

POET Technologies Inc. (NASDAQ:POET) was among Jim Cramer’s latest stock calls, as he suggested investors balance portfolios with hot and cold stocks. Noting the stock’s parabolic move, Cramer said:

Then there’s POET, Navitas, and Credo. These are all semiconductor networking stocks that have gone parabolic, each up around 100% this month. We profiled POET earlier this week. Sounds interesting, but not 100% up interesting. Sell some. If you’re sitting on one of these thinking that you’ve made money, no, you haven’t. You don’t make money until you ring the register.

POET Technologies Inc. (NASDAQ:POET) manufactures semiconductor products using an optical interposer platform that integrates electronic and photonic devices onto a single chip. The company develops optical engines and circuits for several industries, including data centers, telecommunications, and AI applications. On April 21, discussing the company in detail, Cramer said:

While I like the story here so far, let’s not get ahead of ourselves with these recent announcements. POET’s got a joint development agreement. They’re not producing this stuff at scale. I’m calling it early. The stock’s trading like they’re already in mass production, and that bothers me. Just look at the numbers. POET’s financials make it look more of a science project than a business… With a company like this, the challenge is never just whether the technology works in a lab demo. You gotta figure out if it can be manufactured consistently and shipped at what we call scale…

So where do I come down? Look, I like the theme a lot. You know that. The scramble to secure lasers, transceivers, optical integration technology, it’s all, it’s happening. POET has a more interesting story than the average speculative small-cap tech name, but I’m not ready to recommend chasing here. If you want to play the theme, I’d still rather you own the more proven companies like Lumentum, like Coherent, both of which have NVIDIA’s endorsement and money. So the bottom line: While I can endorse speculating on POET Technologies, given how much the stock has run, it has a lot of potential, and it’s definitely worth watching. If you really like it, though, I’m begging you to wait for a pullback before you pull the trigger, as I don’t think you can consider yourself to be early to the story. And that’s sometimes what matters the most.

20. Lightwave Logic, Inc. (NASDAQ:LWLG)

Lightwave Logic, Inc. (NASDAQ:LWLG) was among Jim Cramer’s latest stock calls, as he suggested investors balance portfolios with hot and cold stocks. Cramer mentioned that the company has “almost no revenues” and said:

We get a lot of calls about stocks that have gone parabolic here. The other day, I got a call about Lightwave Logic. It develops polymers for networking equipment. Everybody does that these days. Stock’s gone from $4 to $13 in just over six weeks. This company has almost no revenues. It’s up over 93% this month. Perfect candidate for selling half your stock tomorrow morning.

Lightwave Logic, Inc. (NASDAQ:LWLG) develops and licenses advanced polymer materials used to improve data speeds in hardware for artificial intelligence, cloud computing, and telecommunications. It is worth noting that Cramer made similarly bearish comments on the company on April 13, as he said:

It’s hard for me to recommend this as a nearly $2 billion company when it’s losing money, making a hundred thousand bucks in revenue, even if the story’s real and just beginning to get etched into the AI supply chain. That’s why I’d rather stick with Coherent or Lumentum, although you missed a nice part of the run there… Putting the other options aside, though, there are real challenges for Lightwave. I won’t pretend to be an expert in photonics, but we don’t really know if the company’s proprietary material stays stable over time or if it could be manufactured consistently…

I like the theme a lot. I think the market’s right that optics will matter more as AI infrastructure scales up. I think the scramble to secure lasers, transceivers, and photonics components is real. I also think there’s a serious long-term opportunity for somebody that can help deliver higher speed and lower power to the data center at a reasonable cost. And that’s why Lightwave keeps getting attention. The problem is this: This stock has already run as if the future’s settled…. run like Marvell Technology, another great winner in this sector, and I’m not sure that’s the case. See, even though this is one of the hottest and most important themes in the market, I have a hard time telling a conservative investor to chase Lightwave here.

This is the kind of name that can absolutely keep ripping. I get that. This theme isn’t going away anytime soon, I get that. It’s part of the fourth industrial revolution, I get that too. But when a stock is going up tenfold in a year, and the business is still at an incredibly early stage, and losing money with very little revenue, I think some disciplines should matter. You don’t have to hate the technology to say that the stock may have gotten ahead of itself. We don’t even know how difficult it is to mass-produce this product. So here’s the bottom line: If you like what you’ve heard about Lightwave launch, again, look, I gave you some stuff to like, keep it on the watch list, I think. But after such an incredible move, I think there are better, cheaper ways to play this, Coherent, Lumentum, and especially NVIDIA tomorrow morning.