Top Smart City Stocks for 2024: Ranked by Pure-Play Focus

The smart city movement is here, and it’s all about building a more efficient, sustainable, and connected urban future. With urban population growth soaring, the smart city market is a potential goldmine. From tackling traffic woes to city streets cleaner and safer, companies offering these solutions are poised to make a real difference – and a hefty profit. In this guide, we’ve tiered the top smart city stocks based on their pure-play exposure. Our ranking methodology considers business model, revenue concentration, and vertical integration.

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Credit: KanawatTH/Adobe

Tier 1: Pure-Play Smart City Products

These companies offer specific products for smart cities, which often address unique challenges of urbanization. Investors who want the full upside – and risk – can consider these smart city stocks.

View, Inc. (VIEW)

View, Inc. (VIEW) offers smart glass technology for energy-efficient, adaptive buildings.

View, Inc. is unique among smart city stocks for its Smart Window technology. These windows dynamically adjust natural light, reducing energy costs by 20% on average. Beyond energy savings, View’s smart windows also reduce eye strain by up to 50% and improve sleep quality by up to 37%. Each View installation also includes a smart building platform for control and data collection.

These smart windows have already been installed in over 75 million square feet of commercial space, across 500 smart building projects. That includes corporate offices for customers like Netflix, Google, FedEx, and Amazon. Beyond smart windows, View also offers products like the Immersive Display, which turns smart windows into interactive surfaces. Or the Smart Building Cloud, which optimizes every aspect of building operations.

Gorilla Technology Group Inc. (GRRR)

Gorilla Technology Group Inc. (GRRR) specializes in video analytics, AI-powered surveillance, and security solutions.

Gorilla Technology safeguards the smart city with security, business intelligence, and IoT solutions. Their core product range includes video analytics and access control. As part of their strategy, Gorilla established cost centers in low-cost areas, which resulted in 69% gross margin in 2023. They also saw 189% YoY revenue growth and their first-ever profitable full year ($19.9 million).

Gorilla stands out with unique innovations that target mission-critical applications. Their Air Gap Network system guarantees complete network isolation, making it suited for use in the military, healthcare, and industrial control. Additionally, Gorilla advances AI and cybersecurity by collaborating with Lanner Electronics. Together, they’ve set new industry benchmarks — like dropping AI-enhanced threat detection from seconds to milliseconds.

Xiao-I Corporation (AIXI) 

Xiao-I Corporation (AIXI) specializes in AI for smart cities in China, which has one of the fastest growing electrification and AI sectors in the world.

Xiao-I Corporation plays a key role in developing smart cities in China. They provide AI-powered software and services in smart city projects for the government. Their “cognitive intelligence” platform is used to build chatbots for citizens to get help, combine data to improve city services, and use data to automate city tasks.

It’s difficult to get full details on companies operating in China, and investors should factor in this extra layer of risk. That said, China has one of the fastest growing electrification and AI sectors in the world, so Xiao-I deserves a spot on this list. Just be aware of the unique considerations when evaluating Chinese companies. 

EHang Holdings (EH)

EHang Holdings (EH) focused on passenger drones for urban transportation and logistics challenges.

EHang, based in China, stands out as a smart city stock focused on urban air mobility. Their autonomous aerial vehicles (AAVs) are essentially unmanned drones that can carry passengers. These AAVs or “flying cars” can play a key role in smart cities by reducing traffic congestion and carbon emissions.

EHang has conducted over 42,000 autonomous flights across 14 countries, establishing a solid track record. In October 2023, EHang’s EH216-S received the world’s first Type Certificate (TC) for unmanned passenger drones. This certificate confirmed the EH216-S design passes civil aviation safety standards — paving the runway to begin limited commercial operations in China

EHang has entered into strategic partnerships with several municipal governments in China, which provide policy support, infrastructure access, and funding. Like AIXI, another smart city stock on this list, EH is a Chinese company, which carries unique risks. Still, its position in one of the fastest growing smart city markets makes it very worth keeping an eye on.

Tier 2: Core Smart City Enablers

These are companies that are enabling core requirements of smart cities, like connectivity and sensors. However, they tend to have broader use cases and other revenue options as well. Investors who want a more balanced exposure can consider these smart city stocks.

Cepton (CPTN)

Cepton (CPTN) develops Lidar sensors that are crucial for the detailed 3D mapping needed for autonomous vehicles and monitoring smart city infrastructure.

Cepton provides patented lidar (“light detection and ranging”) solutions for smart city applications. Lidar acts as an “eye” for machines, using pulsed lasers to create detailed 3D maps of an environment. These 3D maps have a range of uses, like helping self-driving cars spot pedestrians and other vehicles, even in low-light conditions. They can also be used to monitor traffic flow, detect accidents, and alert emergency services. Regular Lidar scans can also detect cracks in bridges and other critical infrastructure.

Cepton’s impressive 76% year-over-year revenue in 2023 shows confidence in their technology. Their Cepton Ultra product is especially notable – a long-range, high-resolution lidar for vehicles. Also, Cepton has partnered with Koito, a major supplier to automakers like Toyota. This gives Cepton a clear growth path as it continues to improve its technology.

Cisco Systems Inc. (CSCO)

Cisco Systems Inc. (CSCO) develops routers, switches, and wireless solutions that form the backbone for smart city data and interconnected systems.

Cisco’s business model emphasizes partnerships with governments and businesses. Their core strength is being the “connective tissue” — linking traffic sensors, buildings, and even public Wi-Fi into one network. Products like the Cisco Kinetic for Cities platform can then deliver real-time insights for city officials. They also offer innovative smart lighting, transportation, and connected kiosk solutions.

Cisco’s open architecture approach gives them a big advantage in the smart city space. Unlike closed systems that lock cities into one vendor, Cisco builds its solutions using open standards. This means cities can mix and match sensors, devices, and software from different companies. It also helps cities avoid getting stuck with a single vendor, letting them easily adopt new technologies. This approach makes Cisco a flexible, future-proof partner for cities building their smart systems.

Qualcomm Incorporated (QCOM)

Qualcomm Incorporated (QCOM) provides 5G and wireless networks for low-latency communication between sensors, devices, and autonomous vehicles.

Qualcomm is a leader in 5G wireless technologies for smart cities, with 6G on the way. Their Snapdragon X series of 5G modems have been at the forefront of integrating AI. These will be able to power everything from smart traffic lights to weather sensors. Qualcomm is also fostering the smart city ecosystem through their Smart City Accelerator — an incubator that brings together governments, integrators, and technology providers.

The company has also made major investments in edge computing. For smart cities, it’s key to be able to process and analyze data closer to where it’s collected (on the “edge” of the network). This improves speed, convenience, and reliability of devices. It also reduces the need for centralized cloud computing, and isolates any security breaches before they spread.

Nvidia Corporation (NVDA)

Nvidia Corporation (NVDA) is a household name in AI, which underpins many smart city technologies, but their broader focus makes their smart city exposure less direct.

By now, Nvidia has become a household name in AI. Thus, it’s no surprise that they’re also poised to benefit from smart city growth, as their chips will power the “smarts” of smart cities. For example, smart cities will have cameras everywhere. Nvidia’s chips can analyze that video in real-time, spotting traffic jams, security problems, you name it.

Nvidia’s specialized Metropolis platform is a powerful tool for smart cities. It features pre-trained AI models for common city tasks (traffic analysis, safety, etc.). Metropolis is also optimized for running AI at the “edge” – directly on cameras and sensors. And as a true platform, cities can also develop their own custom AI models on top of Metropolis.

Tier 3: Broad with Smart City Applications

The companies in this tier tend to have much more diversified business models. While smart city solutions might not be their primary focus, they contribute valuable tech and expertise that can be integrated into the larger smart city puzzle. Investors who only want to dip their toes can consider these smart city stocks.

Siemens AG (SIEGY)

Siemens AG (SIEGY), although a conglomerate, has divisions dedicated to smart infrastructure, building automation, and energy management.

Siemens is a global conglomerate in industrial and infrastructure technology. The company has a range of solutions for smart cities. For example, they’ve partnered with New York City on a smart grid project with a clear goal: reduce peak energy demand. This project included smart meters, analysis tools, and dynamic pricing, and it led to a reduction in peak energy demand by 9%.

Siemens has also partnered with Singapore on their digital twin for urban planning. Siemens’ technology gathers data from energy grids, buildings, and transportation systems. It’s then used to create a virtual model of Singapore that mirrors the real-world city in incredible detail. By analyzing data within the digital twin, Singapore can then predict maintenance issues, optimize energy use, and improve traffic flow. 

Honeywell International Inc. (HON)

Honeywell International Inc. (HON) has strong expertise in smart buildings, automation, and control systems.

Honeywell International Inc. is a major player in the smart city market, offering a wide range of solutions. Their “Building Technologies” unit focuses on how to make buildings smarter, safer, and more comfortable. Their “Connected Enterprise” division helps monitor traffic, resource use, and public safety. Their “Industrial Automation” unit provides control systems for power plants and public transportation. Even their “Aerospace” division contributes, with navigation and sensors for self-driving cars.

Underscoring all this, Honeywell’s emphasis on sustainability aligns with the goals of smart cities. The company promotes green buildings, energy-efficient transportation, and cleaner industrial processes. This broad expertise gives Honeywell multiple ways to capitalize on the rise of smart cities.

Nokia (NOK)

Nokia (NOK) contributes their extensive experience in networking and communications, as well as their development of smart grid technologies.

Nokia is a Finnish multinational leader in telecommunications and digital technologies. Nokia is a key player among smart city stocks as it’s a bet on 5G technology. As more devices get added to the IoT, Nokia offers robust solutions for smart city connectivity.

Nokia’s “IoT for Smart Cities” is a fully integrated, modular, and scalable framework for managing smart city technology and services. This solution enables operators to orchestrate all smart city operations from one place. In essence, it’s an IoT platform for integrating data from various sensors and devices.

Nokia has formed strategic partnerships to enhance its smart city offerings. For example, the company partnered with ClearWorld to provide intelligent street lighting solutions. In Canada, Nokia joined forces with Smart City Capital to foster smart city projects. Their focus areas include public safety, smart transit, and autonomous vehicle technology.

Investing in smart cities is not just about potential profits – it’s about investing in a better future. These companies are developing technologies that make cities more efficient, livable, and resilient. As the smart city market continues to explode, keep a close eye on these players, as they’re shaping the future of urban life.

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