We’re not living like the Jetsons yet, but smart home technology is quietly getting there. We might not yet have “robo-maids” that clean our entire house… but we do have robo-vacuums that can keep our floors spotless. As critical enablers like AI continue to advance, smart home capabilities will keep getting fancier as well. The global smart home market is projected to grow by 10.7% annually (CAGR) over the next five years. Naturally, many investors will want to get in on this growth. So in this guide, we’ll cover the top smart home stocks and companies, ranked by pure-play focus.
The main growth driver of the smart home market is consumer demand. Security ranks as the top concern, and smart home security devices let DIY enthusiasts turn their homes into bonafide fortresses. Aside from protecting the home, consumers also care about energy efficiency. It’s not a hard sell for homeowners to get a smart thermostat for $160 when it can then save $180 per year on energy bills.
But perhaps the true “gateway” to going down the smart home rabbit hole is still comfort and convenience. “Alexa, turn down the lights” gradually turns into “Alexa, begin my pre-sleep routine and set my alarm for my yoga class tomorrow.” As people see first-hand the benefits of smart home devices, they naturally begin to deck out their abodes with more and more gadgets.
While the smart home market’s future looks bright, two key challenges still remain as speed bumps to adoption. The first is privacy — no matter how handy smart features become, we’ll never want our homes to spy on us. The second is interoperability — different systems from different brands will need to play nicely with each other. Companies that can address these concerns will gain a huge leg up in this market.
Note: We make every effort to keep our information accurate and up-to-date. However, technology markets do move fast and company situations can change rapidly. Please use this guide as an intro to the smart home landscape; but ultimately, do your own due diligence before taking action.
Tier 1: Pure-Play Smart Home Stocks
For investors seeking direct exposure to the smart home market, these pure-play smart home stocks offer the most focused bets. These companies derive a major portion of their revenue from smart home products and services. While they may carry more sector-specific risk, they could deliver larger returns if the smart home market overperforms.
Alarm.com (ALRM)
Alarm.com (ALRM) is a leader in the smart home and security space with a SaaS platform that powers over 9 million properties. Through that platform, service providers can offer everything from security and video monitoring to energy management and home automation. With over 10,000 service partners and a presence in over 60 countries, Alarm.com has built a massive distribution network that would be difficult for competitors to replicate.
A key strength for Alarm.com is its focus on AI and analytics. It continues to invest heavily in video analytics, machine learning, and predictive maintenance features that add value for both homeowners and service providers. This R&D leadership, along with Alarm.com’s large and growing base of connected devices, creates powerful network effects and high switching costs for customers.
Financially, Alarm.com has an attractive SaaS business model with high recurring revenue, fat margins, and consistent profitability. The company boasts a 94% revenue renewal rate and 86% SaaS gross margins. With multiple growth drivers including international expansion, commercial market penetration, and heavy R&D, Alarm.com is poised to capture smart home market growth. Its proven track record of innovation and strategic acquisitions also add to its moat.
Resideo Technologies (REZI)
Resideo Technologies (REZI) is both a major manufacturer and a distributor of smart home products. Its Products & Solutions segment has a huge portfolio of comfort, security, and energy management products under trusted brands like Honeywell Home. Meanwhile, the company’s ADI Global Distribution business is one of the largest wholesale distributors of security and low voltage products.
A key advantage for Resideo is its relationships with professional installers and service providers. Its products are sold through a network of over 110,000 contractors and its ADI business serves as a key supplier to security dealers and installers. This contractor-focused model separates Resideo from more consumer-oriented smart home players. It’s also growing its direct-to-consumer channel while maintaining its core pro-install base.
Strategically, Resideo is aiming to further optimize manufacturing and add more higher-margin products. Its recent acquisition of First Alert adds a leading smoke/CO alarm brand and expands its retail presence. With exposure to attractive secular trends in energy management, security, and water conservation, Resideo is a diversified play on smart home adoption. The pending acquisition of Snap One would further strengthen Resideo’s position in professionally-installed smart homes.
Arlo Technologies (ARLO)
Arlo Technologies (ARLO is a pure-play leader in smart home security cameras and video doorbells. The company has recently pivoted from a hardware-centric business to a services-led model focused on recurring subscription revenue. Arlo’s AI-powered cloud platform also has advanced features like person, package and vehicle detection that add value to users.
A key advantage for Arlo is its brand recognition and technology leadership in the DIY smart security camera market. It continues to innovate with new product launches and has entered adjacent categories like floodlight cameras. Arlo’s broad retail distribution and e-commerce presence give it mindshare with consumers. The company is also expanding into commercial and SMB markets.
Arlo’s financial profile has improved dramatically as it has scaled its services business, with services gross margins of 77%. Its paid accounts are also up 55% year-over-year and annual recurring revenue up 23%. Arlo’s asset-light business model and improving profitability make it an intriguing pure-play option for investors seeking exposure to the smart home security angle.
SmartRent (SMRT)
SmartRent (SMRT) focuses on enterprise-scale smart home features for multifamily properties and homebuilders. The company’s smart apartment platform includes access control, smart home devices, and property management software. By targeting property managers and developers, SmartRent can achieve rapid penetration across large numbers of units.
SmartRent’s strength lies in its full-stack offering that includes both hardware and software. Its Hub device serves as the brain of the smart apartment, while its user-friendly apps provide an intuitive experience for both residents and property staff. SmartRent’s platform also offers valuable data and analytics to help property managers optimize operations and energy usage.
While still early in its growth trajectory, SmartRent has shown promising momentum with 750,000 units deployed and robust bookings growth. Its focus on the underserved multifamily and build-to-rent markets allows it carve out a unique niche in the “smart apartments” market. With a large addressable market of over 28 million multifamily units in the U.S. alone, SmartRent has a long runway for growth.
Tier 2: Smart Home Enablers
This tier of smart home stocks includes companies that make critical components for smart home devices. While not only focused on smart homes, these firms play a key role in enabling them to work as advertised. Investing in these enablers offers a way to capture smart home growth while diversifying across multiple tech sectors.
Silicon Labs (SLAB)
Silicon Labs (SLAB) specializes in wireless connectivity for IoT and smart home applications. In other words, it makes chips that let smart devices communicate. The company’s wireless system-on-a-chip (SoCs) and modules support protocols like Zigbee, Bluetooth, Wi-Fi, Thread, and Matte. Silicon Labs’ software and development tools also simplify the creation of interoperable smart home devices, shortening time-to-market for its customers.
With its sole focus on IoT following the divestiture of its infrastructure and automotive business, Silicon Labs is focused on capturing smart home trends. Its broad customer base of over 21,000 customers provides diversification and growth potential as the smart home market grows. Silicon Labs’ expertise in low-power wireless design is especially valuable for battery-operated smart home devices, while its position in both the consumer and industrial IoT markets allows for cross-pollination of technologies.
NXP Semiconductors (NXPI)
NXP Semiconductors (NXPI) is a leader in secure connectivity and processing. The company’s broad portfolio spans key smart home technologies like NFC, ultra-wideband, Bluetooth LE, Zigbee, and Matter – the new smart home interoperability standard. NXP’s security heritage also gives it an edge in addressing privacy and cybersecurity concerns.
NXP is gaining traction in the smart home space, with design wins in areas like smart speakers, Wi-Fi routers, smart appliances, and home automation hubs. Its ability to deliver complete systems, combining connectivity, processing, and security, makes it an attractive partner for smart home device makers. NXP’s focus on energy efficiency and sustainability also aligns well with smart home trends towards less power usage and eco-friendliness.
Skyworks Solutions (SWKS)
Skyworks Solutions (SWKS) focuses on radio frequency (RF) and analog semiconductors used in wireless tech. Their front-end modules and SoCs enable efficient, high-performance wireless connections across Wi-Fi, Bluetooth, Zigbee, and cellular networks – all essential for smart home devices. Skyworks’ ability to deliver both premium performance and cost-effectiveness makes it a key supplier across various smart home product tiers.
As the smart home market grows, Skyworks is set to benefit as devices adopt more wireless standards and higher data rates. The company’s close ties with major smartphone OEMs also provide a path into smart home ecosystems built around mobile devices. Skyworks’ focus on emerging standards like Wi-Fi 6E and 7 will allow it to stay at the forefront of wireless technology.
Ambarella (AMBA)
Ambarella (AMBA) stands out for its AI-powered computer vision chips that allow smart security cameras, video doorbells, and home robots to “see.” The company’s CVflow architecture enables highly efficient AI processing at the edge, allowing smart home devices to run computer vision and machine learning locally. This edge AI capability is key for smart home devices that require both low latency and data privacy.
Ambarella is a rising player in the smart home market, with design wins across major brands and a clear product roadmap. Specifically, Ambarella focuses on edge AI systems-on-a-chip (SoCs), like its CV3 family for autonomous driving that can process up to 500 trillion operations per second. This expertise in high-performance, low-power AI chips will become more and more important as consumers seek smarter and smarter devices.
Universal Electronics (UEIC)
Universal Electronics (UEIC) is a leader in universal control and sensing. The company’s extensive device knowledge base and QuickSet cloud platform enable discovery, setup, and control of all kinds of smart home devices. This interoperability expertise can help consumers integrate diverse smart home products.
UEIC is strategically expanding beyond its traditional strength in entertainment control into broader smart home functions, especially in climate control and home automation. Its recent wins with major HVAC OEMs and its innovative products like voice-enabled remotes and smart thermostats prove its ability to apply its core technologies to new smart home categories. UEIC’s focus on both hardware and software, including its QuickSet Cloud service, offer multiple avenues for growth and recurring revenue streams.
Tier 3: Tech Giants with Smart Home Business Lines
For those seeking smart home exposure with less risk, these large tech giants offer smart home products as part of their broader business. While smart homes may not be their main focus, these companies do have vast resources and existing ecosystems to compete effectively. Investing in these stocks offers smart home exposure along with the stability and diversification of large-cap tech companies.
Amazon (AMZN)
Amazon (AMZN) is a leader in smart home devices with over 300 million Alexa-enabled devices worldwide. The company’s strength lies in its vast array of affordable smart home products, from Echo speakers to Ring doorbells and cameras. Amazon’s strategic acquisitions, such as eero for mesh Wi-Fi systems and Blink for home security, have further expanded its smart home portfolio. The Alexa platform’s open nature has attracted over 100,000 third-party skills, creating a robust ecosystem that keeps users engaged and dependent on Amazon’s products. All this while helping Amazon gather valuable consumer data to enhance its core e-commerce business.
Alphabet (GOOGL)
Alphabet (GOOGL) is the owner of the popular Google Home and Nest product lines, and it’s known for its AI expertise. Google Assistant, known for its natural language processing, powers smart home devices and integrates with Android smartphones. This gives Alphabet a huge edge in mobile-first markets, as Android has a 70% market share worldwide. Google’s acquisition of Nest also bolstered its position in the smart home sector, with popular products like the Nest Learning Thermostat and Nest Cam. Google’s open-source smart home standard, Matter, built alongside other tech giants, aims to improve interoperability across different brands and platforms.
Apple (AAPL)
Apple (AAPL) stands out in the smart home market through its focus on privacy, security, and tight ecosystem. Its HomeKit framework is a secure foundation for smart home devices, with end-to-end encryption and local processing of voice commands on devices. Apple’s HomePod speakers, while not as widespread as competitors’, serve as central hubs for HomeKit-enabled devices. The addition of smart home controls into iOS devices through the Home app and Siri shortcuts creates a frictionless user experience for the large base of iPhone and iPad users. Apple’s recent adoption of the Matter standard also signals a move towards greater interoperability beyond its traditionally closed ecosystem.
