Chris Neiger, The Motley Fool

Sat, May 24, 2025, 1:00 PM5 min read

• AT&T is helping companies connect their AI devices and enabling edge computing artificial intelligence services.

• Palantir's AI analytics services are tapping into a $1.7 trillion market.

• Palantir is the better AI stock, but it comes at a hefty premium.

• 10 stocks we like better than Palantir Technologies ›

Nearly every company that's even remotely related to the tech industry is betting that artificial intelligence (AI) will be a key driver of their business in the coming years. This is giving investors a lot of choices when it comes to picking an AI stock.

Two companies that have seen their share prices surge recently and are no doubt on some investors' AI stock short lists are telecommunications giant AT&T (NYSE: T), which is critical to connecting AI devices to the internet, and AI data analytics company Palantir Technologies (NASDAQ: PLTR).

Here's how the two companies stack up in the AI space.

AT&T may not be the first company you think of when you're thinking about AI stocks, but the telecom's massive wireless internet infrastructure is a key component to advancing AI services. For example, AT&T's ultra-fast 5G networks are used for AI-powered tech like autonomous vehicles.

Internet-enabled devices are becoming more powerful and more useful with AI, making fast and reliable internet connections even more important to powering AI assistants and other services. AT&T also works with tech giants, including Alphabet's Google and Microsoft, to establish edge network computing services that ensure AI and other services work well in specific locations.

But while AT&T helps with the connectivity of AI devices, Palantir is an actual artificial intelligence company. Palantir sells AI-powered analytics services and has grown rapidly as the U.S. government and private companies have clamored for its services.

Using AI to power analytics can help with everything from defense and military operations to managing supply chains and monitoring the electric grid. This wide application of services means that Palantir has a total addressable market of $1.4 trillion, according to Morningstar data.

It should come as no surprise that Palantir is growing much faster than AT&T. As a large, established telecom, there's only so much sales growth AT&T can experience.

AT&T's sales rose 2% in the first quarter to $30.6 billion, and non-GAAP (adjusted) earnings increased 6% to $0.51 per share. The company's management forecasts free cash flow of $16 billion for 2025 and adjusted earnings per share of $2.02, at the midpoint of guidance.