There's no shortage of tech companies focusing on artificial intelligence (AI) these days, but two companies that have attracted significant attention from investors are IonQ (IONQ -2.07%) and Palantir Technologies (PLTR -1.49%).

IonQ's share price has rocketed 264% higher over the past year, and Palantir's stock surpassed even that, skyrocketing 448%. But with such impressive gains, which company looks like the better long-term AI stock? Here's what's going right with both companies, and what to look out for.

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IonQ's biggest opportunity

IonQ is first and foremost a quantum computing company. The company's quantum computers create a linear chain of ions that could eventually reach 100-plus qubits (a quantum computer's unit of processing) while delivering lower error rates than current quantum computers.

IonQ has some overlap in the artificial intelligence (AI) space because quantum computers can be used to do things like AI model training. IonQ said recently that its quantum computers were used to train large language models (LLMs), and they enhanced the LLMs' understanding of the sentiment being communicated in sentences.

The big opportunity for IonQ is likely years away, though, as quantum computers may be potentially used to discover new materials, find cures for diseases, and advance climate science. Collectively, all the long-term prospects for quantum computing could create $850 billion in economic value by 2040, according to research from Boston Consulting Group.

It's important to note that while IonQ has gained significant investor attention, it's still a speculative investment. Quantum computing is still in its early stages, IonQ isn't profitable, and the company's revenue was flat on a year-over-year basis in the recently reported first quarter.

What's going well for Palantir

Palantir is an AI analytics company that makes its money from selling services in the commercial and government spaces. Both segments are growing fast for Palantir, with government revenue growth increasing 45% in the first quarter and commercial sales spiking 71%.

Even more impressive was that Palantir's earnings doubled from the year-ago quarter to $0.08. The strong results led Palantir's management to raise its revenue guidance for the full year to about $3.9 billion, up from its previous estimate of $3.75 billion.

Palantir is successfully tapping into the massive AI analytics market, with Morningstar estimating the company's total addressable market is $1.4 trillion.

But Palantir's rapid growth and the subsequent share price surge of more than 1,000% over the past three years have resulted in a sky-high valuation for the company. Palantir's stock now has a forward price-to-earnings multiple of 200, which is extremely high by any standard.

Palantir is the better AI stock, but it's not a buy right now

Palantir comes out ahead in this matchup because the company has a profitable AI business with rising sales. Compared to Palantir, IonQ looks too speculative, and the company isn't even significantly increasing sales -- a must for a young start-up.

But despite being the better AI stock, I'd caution against buying Palantir right now. The company's valuation is just too high to justify it. If Palantir's stock price were to experience a significant pullback, it might be OK to open a small position, but as it stands right now, Palantir is too expensive.

That doesn't mean it's not a good company, but it's hard to justify its premium price even with the company's strong sales and earnings growth.