“Smart city” is the quintessential buzzword—novel, punchy, and conveniently vague. But what exactly is a smart city? Is it a bundle of technologies? A vision for urban planning? A moonshot public-private partnership? The answer is that it can be all or none of these things. In some cases, it refers to a sweeping vision, like India’s $24 billion Smart Cities Mission, which aims to retrofit 100 cities with new technology. In others, it’s piecemeal, like Barcelona’s IoT-enabled waste management or Singapore’s autonomous vehicle trials. But despite (or perhaps because of) its loose definition, smart cities are a projected $4.6 trillion market, according to Fortune Business Insights. In this guide, we’ll explore the top smart city stocks, ranked by their pure-play focus.
On paper, the smart city pitch is irresistible: a multi-trillion-dollar addressable market fueled by global urbanization trends. Population growth has made urban centers more congested than ever. Meanwhile, emerging technologies like AI and the IoT promise new solutions to the perennial headaches of city life—traffic, pollution, and inefficiency. However, investing in the smart city market tends to feel like chasing a moving target. Some segments, like energy management and smart grids, are well on their way to profitability. Others, like autonomous public transit or flying taxis, have longer timelines and uncertain adoption curves.
The real challenge when looking for smart city stocks, then, is seeing past the glossy renderings and buzzwords. The integrated vision—a city that works like a self-correcting, well-oiled machine—is still nascent and fractured. So rather than betting on sweeping transformations, investors might find value in specific subsectors poised for near-term disruption, such as AI-powered traffic systems or water management solutions in regions where scarcity is becoming critical.
Note: We make every effort to keep our info accurate and up-to-date. However, emerging tech moves fast and company situations can change overnight. This guide is an intro to the smart city market; but ultimately, do your own due diligence before taking action.
Tier 1: Pure-Play Smart City Stocks
Tier 1 smart city stocks are defined by their clear focus on urban tech. These companies are pure plays on specific innovations like AI-driven mobility, EV infrastructure, and data-intensive utility management. They are high-risk, high-reward propositions for investors seeking focused exposure to smart city growth.
Rekor Systems Inc. (REKR)
Rekor Systems (REKR) uses AI-driven vehicle recognition to help cities track license plates and decode commuter behavior.
Rekor Systems is banking on one of the most underappreciated data points in smart city tech: vehicle recognition. On the surface, it’s easy to pigeonhole Rekor as just another traffic technology provider. But that would be missing the point. Rekor’s flagship “vehicle recognition software” might sound like a glorified license plate reader at first glance. But the company is attempting to do something far more ambitious: decode and predict behavioral patterns of the modern commuter, one vehicle at a time.
In 2023, Rekor began carving out partnerships with several municipalities, helping cities monitor everything from traffic flow to identifying uninsured vehicles. The company’s bread and butter is its AI-driven analytics platform, Rekor One. This platform leverages data gathered from cameras to analyze real-time vehicle information, from make and model to dangerous driving behaviors. It’s a business model that thrives on data volume—the more eyes on the street, the better the software gets. Think of it as applying the logic of internet cookies (the trackers websites use for analytics or serving ads) to the physical movement of automobiles.
Yet Rekor’s stock price has had a rollercoaster run, caught between investor skepticism about the firm’s ability to scale profitably and optimism that their municipal partnerships could trigger substantial growth. The challenge ahead for Rekor is whether it can turn data into dollars at a large enough scale, convincing cities—and maybe even private sector logistics firms—to embrace its insight as essential infrastructure.
EVgo Inc. (EVGO)
EVgo Inc. (EVGO) focuses on expanding its fast-charging network for EVs while striving for profitability amid heavy competition.
EVgo Inc. is an intriguing option among smart city stocks due its overlap with the EV market. EVgo stands out as one of the largest and most public-facing providers of fast-charging stations in the United States. Founded in 2010, EVgo has amassed over 1,100 fast-charging locations across 40 states, serving more than 1.2 million customer accounts.
The company’s growth is closely tied to an ambitious expansion plan, bolstered by a $1.05 billion loan guarantee from the U.S. Department of Energy in late 2024. This capital infusion aims to fund approximately 7,500 public fast-charging stalls across nearly 1,100 stations. EVgo’s strategy involves not only targeting urban centers but also suburban and rural areas. To do so, the company has entered a partnership with key players in the car and transportation industry, such as General Motors, Lyft, and Uber.
Yet, the challenge for EVgo remains profitability. Despite impressive growth in revenue and infrastructure, the company has been operating at a loss. This is an inherently capital-intensive subsector, with a winner-takes-most reward profile due to its network effects. Thus, investors should keep a close watch on EVgo’s ability to scale profitably as it competes with other charging network providers like ChargePoint and Electrify America.
Itron Inc. (ITRI)
Itron Inc. (ITRI) leverages decades of utility expertise to digitize energy, water, and gas data—key to smart city infrastructure.
If there were a gray-haired eminence among smart city stocks, Itron would fit the bill. Itron’s been around since 1977, an “old guard” in a sector that’s largely defined by startups and newcomers. But Itron’s smart city ambitions are built on a tried-and-true strategy: making utilities smarter. The backbone of a smart city is its infrastructure, and Itron specializes in precisely that, providing the metering and sensing technologies that help a city ‘feel’ how it’s functioning.
The company’s crown jewel is its IoT platform, which gathers data from smart meters that measure electricity, gas, and water consumption. It’s almost quaint how important this is, but making sense of energy consumption patterns is critical for any city that hopes to achieve efficiency goals. To date, Itron has deployed over 200 million smart devices globally, giving it a major footprint in cities across North America and Europe.
What’s fascinating about Itron is its pivot to “smart city operations.” It’s rebranding itself from a meter provider to a comprehensive urban problem-solver. But investors have remained cautiously optimistic—in line with the company’s steady (if unspectacular) revenue growth. The main issue will be whether Itron’s decades of technical know-how can successfully pivot to more aggressive software-based strategies without falling behind newer, nimbler competitors.
Badger Meter Inc. (BMI)
Badger Meter Inc. (BMI) offers smart water monitoring solutions, tapping into the increasing demand amid growing scarcity.
Badger Meter has one of those names that suggests something niche or folksy. But in reality, Badger Meter deals with something far more ubiquitous and crucial: water. In the smart city context, that means helping cities understand how water flows, and where it’s wasted. This may not sound as sexy as, say, autonomous vehicles or neural networks, but it’s vitally important.
Water infrastructure is aging faster than most cities would like to admit. Badger Meter makes it possible for cities to monitor leaks, usage, and efficiency in real-time, which is crucial when we’re talking about infrastructure that often predates World War II. Their smart water solutions—sensors, meters, and analytics—create a feedback loop that helps municipalities make data-driven decisions. The company is profitable (a rarity in smart tech), with net margins hovering around 15% as of late 2024.
Badger has a great advantage: it’s dealing in scarcity. As cities face increased pressure to deal with drought and aging infrastructure, water monitoring becomes indispensable. Investors might not see the flash and boom of other tech plays, but Badger Meter offers something cities will always need—better management of their most vital resource. It’s a compelling narrative, and one that helps explain its steady share price appreciation.
Verra Mobility Corporation (VRRM)
Verra Mobility (VRRM) profits from urban traffic enforcement, offering cities automated tolling and compliance systems.
Verra Mobility sits at the intersection of cars, compliance, and cash flow. It’s the kind of company that’s easy to hate—but only because it’s so good at making money from urban dysfunction. In essence, Verra handles automated enforcement: tolling systems, red-light cameras, speed enforcement. If you’ve ever grumbled at a speed camera ticket, you’ve likely indirectly interacted with Verra Mobility.
The key to understanding Verra is that it’s essentially in the business of monetizing inefficiency. Cities get congested, people speed, and Verra offers the infrastructure to both control and capitalize on those behaviors. It’s not just punitive, though: Verra’s systems have measurable public safety benefits, reducing accidents and managing congestion, thus giving it a more civic-friendly face.
Like Badger Meter, Verra has seen a steady profit margin that hovers around 15%. But unlike the others on this list, Verra doesn’t make its money from efficiency or predictive analytics but from enforcement. This makes it uniquely positioned within the smart city spectrum—less focused on new value, more focused on revenue capture. As long as cities need better ways to manage traffic and raise funds without raising taxes, Verra will have a role to play.
Tier 2: Smart City Enablers
Tier 2 consists of the smart city enablers—firms that develop and supply core technologies like advanced sensors, LiDAR, and edge AI. These smart city stocks aim to bridge the gap between futuristic visions and practical deployment, while also being flexible enough to target other markets and revenue sources.
Ouster Inc. (OUST)
Ouster (OUST) aims to scale its digital LiDAR sensors across smart cities, supported by its Velodyne merger.
Ouster believes that LiDAR, once used primarily for measuring wind patterns and mapping oceans, is destined to become the heart and soul of how autonomous systems “see” the world. Their endgame is to make this sensor as common as a lightbulb in a smart city. What makes Ouster’s digital LiDAR unique is its two-chip architecture. By utilizing the latest advancements in semiconductor technology, Ouster has been able to increase the resolution of its sensors without increasing their size or power requirements. This is crucial for data-rich tasks like indoor mapping and tracking in urban environments.
Ouster’s pitch is scalability. They’ve been aggressively pushing their digital approach to LiDAR, which has allowed them to make sensors cheaper and more versatile. Their technology features proprietary multi-beam sensors and is designed to disrupt not just automotive markets but also robotics and smart infrastructure. The urban landscape—and cities with ambitions to manage traffic, energy, and surveillance in real-time—represents a significant opportunity.
The challenge for Ouster, as it stands, is that it’s operating in a highly competitive environment. However, their recent merger with Velodyne gives it more than enough firepower to compete and win. The merger brings together Ouster’s innovative digital LiDAR technology with Velodyne’s established market presence and product suite. The combined company, now operating under the Ouster name, is uniquely positioned to leverage synergies in R&D, manufacturing, and distribution.
Aeva Technologies (AEVA)
Aeva Technologies (AEVA) provides innovative 4D LiDAR that captures both position and velocity data for advanced urban sensing.
Aeva is another key player in LiDAR technologies. However, they’re bringing a twist to the formula by incorporating FMCW (frequency-modulated continuous wave) technology. This allows their LiDAR to do something that’s both simple and profound: see, and also measure velocity. It’s an elegant solution to a problem most city planners didn’t realize they had.
Basically, what sets Aeva’s LiDAR apart is that it’s “4D”. It can capture velocity data directly through the use of its FMCW technology, unlike traditional time-of-flight LiDAR systems that only measure distance. This unique capability enables Aeva’s sensors to distinguish between static and moving objects in real-time, which is crucial for managing dynamic urban environments. For instance, a smart traffic system using Aeva’s sensors could not only detect the position of cars, pedestrians, and cyclists but also understand how fast they are moving.
Aeva has partnered with the likes of Nikon and are eyeing the industrial automation and automotive markets with a keen focus on achieving mass production by 2025. However, Aeva does have a long path to profitability. The big question is whether they can bridge the financial chasm before established players box them out of their own market.
Gorilla Technology Group (GRRR)
Gorilla Technology (GRRR) integrates edge AI analytics into smart city operations, focusing on real-time insights.
With a name like Gorilla Technology, you might imagine something brute-force or clunky, but in reality, Gorilla’s approach is anything but. This is the data analytics layer—the central brain—to all those sensors that companies like Ouster and Aeva are putting on the streets. Gorilla specializes in edge AI solutions, where the computational heavy-lifting happens closer to the data source, making it especially critical for real-time smart city applications.
The company, headquartered in London, provides everything from video analytics to cybersecurity for connected devices. In the context of a smart city, their tech can be used for real-time surveillance, behavior analysis, or simply to generate insights for urban planning—such as where foot traffic creates bottlenecks or where energy is being wasted. They’ve also secured key partnerships with big names like Nvidia and Intel.
Gorilla went public via SPAC, and like many companies that took that route to the market, they’re still in the early days of generating consistent revenue. However, their leadership in digital transformation projects in Asia-Pacific, the region currently most gung-ho about smart city initiatives, is encouraging. Gorilla’s story is one of great potential—but one where the investors will need to be patient.
Xiao-I Corporation (AIXI)
Xiao-I Corporation (AIXI) specializes in AI-driven conversational systems, betting on China’s aggressive smart city adoption.
Xiao-I Corporation is the quintessential smart city play if you’re betting on the rise of artificial intelligence in urban China. The company is built around natural language processing (NLP) and AI conversational systems. It’s the sort of tech that allows citizens to interact with the state’s infrastructure almost as if they were talking to a helpful concierge.
Xiao-I began by providing AI chatbot services, but its ambitions have grown—they now provide smart city solutions that integrate their AI into public services, from healthcare to public safety. This is not a minor undertaking in a country like China, which houses many of the world’s mega-cities and has been aggressively pursuing AI integration in urban planning. Xiao-I’s technology is underpinned by its strong patent portfolio in NLP and AI, with over 100 patents in China alone.
However, financially, Xiao-I still remains a bit of a dark horse. Their IPO on the NASDAQ suggests they’re looking for international credibility, but as with many Chinese firms, transparency remains a lingering question mark. Their core value proposition lies in bridging AI and public infrastructure, and while they have the home-field advantage in China, international expansion—and convincing the Western market of their reliability—remains a considerable hurdle.
Digi International Inc. (DGII)
Digi International (DGII) connects IoT devices in smart cities, providing the communication backbone for sensors and systems.
Founded in 1985, Digi has positioned itself as a key player in the IoT (Internet of Things) landscape, providing embedded systems, network routers, and cloud solutions that underpin the infrastructure of smart cities. Their technology ensures that the myriad of sensors, cameras, and meters in a city are not just isolated gadgets but part of a coherent network that can be monitored, analyzed, and controlled.
One of Digi’s flagship offerings is their line of cellular routers, particularly the Digi TX64 and TX54, designed to connect and manage transportation systems, from buses to emergency vehicles. The use case would be a bus system that can update routes based on real-time traffic information or first responders that can instantly coordinate movements in a crisis. Their routers have also been built to withstand harsh environments, from scorching deserts to icy mountain roads.
Digi benefits from the growing adoption of IoT in various sectors, especially in energy, transportation, and industrial automation. The company has also been steadily acquiring smaller firms, such as the purchase of Ventus, which enhances their managed network services portfolio. Basically, due to their behind-the-scenes “connective tissue” strategy, Digi is not necessarily the kind of play that offers explosive growth. But for those with an eye on the fundamentals, Digi represents a more stable bet on the future of urban connectivity.
Tier 3: Smart Infrastructure Providers
Tier 3 smart city stocks are the established industrial powerhouses pushing into urban tech. They leverage their deep-rooted experience in energy, connectivity, and automation. Their strength lies in balancing innovation with reliability, making them safer, albeit slower-growth, options in the smart city market.
Siemens AG (SIEGY)
Siemens AG (SIEGY) integrates smart city technologies with its extensive infrastructure and engineering expertise.
This German engineering conglomerate that has steadily pushed into the smart city market over the years. If a city wants to automate its power grid or reduce congestion with intelligent traffic systems, Siemens is often at the center of the pitch. Their flagship smart city product, Insights Hub (formerly MindSphere), is an IoT platform that essentially aims to connect everything—trains, building systems, even traffic lights. The platform has been used in places like Singapore to streamline urban planning, and Siemens claims that its projects can boost energy efficiency by up to 30%.
Siemens is playing the long game, with one foot firmly in the infrastructure of the past and another in the digitally connected cities of the future. Still, the company has a few challenges. Their sprawling conglomerate structure means there’s almost always a bit of organizational lag when it comes to moving quickly—especially compared to their more nimble, software-focused peers. Yet, their unmatched experience in critical infrastructure gives them a staying power that cities—and investors—find hard to ignore.
Schneider Electric SE (SBGSY)
Schneider Electric (SBGSY) focuses on energy management and building automation to help cities achieve efficiency targets.
Schneider Electric is often described as a dark horse in the smart city race. While Siemens might provide the physical infrastructure, Schneider is the intelligence that makes that infrastructure smart. Their “EcoStruxure” platform is something of a technological Swiss Army knife—it provides real-time energy management, integrates building automation, and even looks at data to make it all more efficient. What makes Schneider particularly interesting is their commitment to energy management, especially at a time when cities are under pressure to cut emissions.
Energy management represents a significant portion of the company’s €34 billion plus revenues. Thus, Schneider has found a niche in smart cities by focusing on distributed energy resources—things like solar power and battery storage—and how they integrate into urban environments. A good example is their work with Barcelona, which has used Schneider’s solutions to optimize building energy usage, resulting in a reported 20% reduction in electricity consumption.
The major risk for Schneider lies in competition. Their core offerings intersect with a growing number of players—from startups innovating in battery technology to large tech companies entering the smart building space. Yet, the company’s focus on practical, incremental improvements rather than moonshots is often what gets contracts signed.
Cisco Systems Inc. (CSCO)
Cisco Systems (CSCO) brings connectivity to smart cities to enable real-time data and urban services.
Cisco might seem like an odd man out in a conversation about smart cities, but the truth is, no smart city operates without a robust digital nervous system. That’s where Cisco comes in. For decades, Cisco has been connecting companies through hardware—routers, switches, the bones of the internet itself. They’ve taken that expertise and moved into connecting entire cities with their “Cisco Kinetic for Cities” platform. Take Kansas City, where Cisco’s smart city initiative was implemented to provide free public Wi-Fi, gather data on traffic flows, and even monitor streetlights to increase efficiency. It’s not glamorous, but the value proposition of real-time data and connectivity is undeniable.
Cisco’s hardware-first background puts them in an interesting position. On the one hand, they’re deeply trusted—no one questions whether Cisco knows how to build and maintain the networks that are critical for a smart city. On the other hand, the company has been struggling to pivot to a software and services-first model, which is where the true profit margins lie. Currently, only a small fraction of Cisco’s revenues come from smart cities. This is more of an add-on business for Cisco, but it could become a key growth lever as cities demand more connected infrastructure.
ABB Ltd. (ABBNY)
ABB Ltd. (ABBNY) bets on electrification and robotics in smart cities, including EV charging and urban transport.
ABB, the Swiss conglomerate, has been betting big on automation, robotics, and electrification. These are three pillars of any smart city that aims to lower costs and maximize efficiency. Their “Ability” platform pulls together data analytics and remote monitoring into a cohesive package, and it’s already been deployed in cities like Doha to help optimize their energy usage.
ABB’s smart city expertise comes largely from its work in electrification and robotics. When you see an electric bus quietly cruising down the streets, there’s a decent chance that ABB played a role in the charging infrastructure that makes it possible. They’re not necessarily trying to integrate entire city systems like Siemens, but rather focus on making sure the components—the buildings, the grids, the public transport—run as efficiently as possible.
A good chunk of ABB’s over $30 billion in revenue comes from its Electrification segment. ABB is also betting heavily on EV infrastructure, which aligns perfectly with the broader goals of smart cities. The risk here is whether ABB can stay focused enough to keep its edge over startups vying for the same pie—it’s a company with a lot of irons in the fire. But their commitment to electrification and robotics makes them one of the more well-defined bets on those specific technologies.
Honeywell International (HON)
Honeywell (HON) uses advanced sensing and data analytics to help cities make real-time decisions.
Honeywell might still be best known to most people as the name on their old thermostats, but these days, it’s one of the more aggressive players in the smart city game. If Cisco aims to be the nervous system and Schneider aims to be the brain, Honeywell is aiming to be the senses. Honeywell is helping cities understand what’s going on in real-time, using a constellation of sensors, building systems, and data analytics tools like their “Honeywell Forge” platform.
Honeywell’s major smart city projects are all about data—collecting it, analyzing it, and acting on it. Their work with Dubai is a great example: they implemented an urban monitoring system that analyzes everything from air quality to energy usage, helping city officials make decisions based on real-time data. Honeywell has sizable revenues of over $36 billion, and their building technologies and performance materials divisions have become critical growth areas, driven largely by urban demand.
The challenge for Honeywell is to keep their legacy operations from dragging down their innovation potential. They are still heavily involved in industrial manufacturing, which is a much slower, lower-margin business compared to the growth potential of smart cities. Yet, Honeywell’s diversified portfolio also provides a kind of stability that pure-tech players don’t have—cities trust them because they’ve been in this kind of business for decades.