Cryptocurrency's ascent following President Donald Trump's victory on election night has been truly remarkable. The price of Bitcoin, the world's largest cryptocurrency, has surged past $100,000 and many altcoins also skyrocketed.
Cryptocurrency has seen a remarkable ascent following President Donald Trump's victory on election night. The price of Bitcoin, the world's largest cryptocurrency, has surged past $100,000 and many altcoins have also skyrocketed.
The price of meme token Dogecoin (DOGE -11.24%) has surged 112% since election night. Crypto proponents are optimistic about a regulatory environment that is less burdensome than under former President Joe Biden and likely outright bullish for the sector. Dogecoin's market cap has now surpassed $49.5 billion as I write this, rivaling many large and developed tech and artificial intelligence (AI) companies. Can Dogecoin eventually surpass cloud networking giant Arista Networks (ANET 1.20%), which has a market cap around $143 billion?
Arista Networks has benefited from the AI trade In every big thematic trade, you've got the stocks at the center of the trade and those surrounding them. It's been hard to pinpoint the exact center of the AI trade because it seems like nearly every industry can benefit, and any stock that can prove some connection to AI sees its share price go up as investors get excited. The "Magnificent Seven" stocks have been the largest beneficiaries of the AI trade, with investors betting that their scale and tech prowess can open up serious streams of revenue down the line.
AI chipmaker Nvidia is at the center of the AI trade even though it's really a pick-and-shovel play, given that it makes the chips that power AI solutions. Arista Networks has been clumped in with the AI trade because it provides scalable cloud solutions for data centers, which AI companies rely on due to the amount of data needed to power the technology. More specifically, Arista designs ethernet switches that assist in fast data transmission, which data centers need to support tech like Nvidia's chips.
The stock has been a big winner in recent years and now has a roughly $143 billion market cap. Following the recent emergence of DeepSeek, a Chinese AI chatbot that reportedly built a similar solution to ChatGPT at a fraction of the cost, Arista stock sold off intensely, like many others in the AI sector. Still, most analysts think the company has a bright future. Analysts at Piper Sandler recently -- before the DeepSeek-fueled AI sell-off -- said that they think the company could be the most talked about "winner" of the recently announced $500 billion Stargate project because switches represent such a large portion AI infrastructure spend and Arista controls significant market share.
Can Dogecoin leap Arista Networks? Dogecoin has long been one of the largest cryptocurrencies in the world. While it started as a meme token and very much still is today, Dogecoin's life has lasted a lot longer than many probably expected. The cryptocurrency is not viewed to have a strong technical network or possess any great utility. However, what Dogecoin has arguably done better than anyone is use the power of being a viral sensation to create a fervent online community.
Dogecoin garnered the attention of many prominent celebrities, like Tesla CEO Elon Musk, which created an even stronger community. Whenever Musk tweets something that has to do with Dogecoin, the token's price often moves higher. However, it's hard to make much of an investment case for Dogecoin. While there is a limit on the issuance of tokens, there is no end date on issuances, so the token doesn't provide investors with any kind of inflation hedge like Bitcoin. Furthermore, the network does not offer anything special from a technical standpoint. It can process about 30 transactions per second, which is better than Bitcoin, but not nearly as high as other networks.
I think Dogecoin can keep moving higher as long as the crypto bull market continues. However, given that it's already more than doubled, I find it unlikely that it will be able to do so again and overtake Arista Networks. If Arista Networks stopped growing, which isn't likely, Dogecoin's current market cap would have to increase roughly 186% to reach Arista Networks' size. Both investments are likely to be volatile, but Arista seems to have a brighter future with more clear catalysts than Dogecoin.
