In this article, we discuss the best smart city stocks to buy.
Cities are bracing for a year of significant changes as new federal guidelines and emerging technologies mix with ongoing challenges. A new presidential administration in 2025 was expected to highlight new priorities and change some existing programs, which would affect the funding cities and states rely on.
Technologies like AI, self-driving robotaxis, more electric vehicles, and alternative-fuel buses will reshape how traditional city services work. Long-term problems like lack of affordable housing, rising homelessness, and climate change are still pressing, and local governments will need to manage these changes while keeping their communities afloat and functional.
To handle this growing complexity, smart cities are now trending around the world, using data-driven solutions that allow them to plan, monitor, and optimize resources more effectively. According to Capgemini, as cities get smarter, new digital services like smart grids, on-demand transportation, and intelligent water management will alter how public services operate while generating lots of data. Urban data platforms will be utilized to manage such copious data effectively, combining and analyzing information from different city systems to make services more efficient and support bigger smart city projects.
The insights generated from these platforms also feed into advanced tools like digital twins and IoT technologies, which help city planners anticipate problems and make better decisions. Similarly, with more extreme weather events happening, cities will be focusing on making infrastructure stronger. IoT tools for flood monitoring and disaster planning protect people and resources, while smart water systems help manage shortages through recycling and better distribution.
Finally, integrating environmental health technology ensures that as cities grow smarter and more resilient, they remain places where people can live healthier, safer, and more sustainable lives.
With this outlook in mind, let’s take a look at the best smart city stocks to invest in.
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Our Methodology
In this article, we selected the best smart city stocks from the iShares Smart City Infrastructure ETF. After manually perusing the top 25 holdings of the ETF, we picked the stocks which were most popular among elite hedge funds as of the second quarter of 2025. These 10 stocks have also received attention from Wall Street analysts and major media outlets.
Why are we interested in the stocks that hedge funds pile into? The reason is simple: our research has shown that we can outperform the market by imitating the top stock picks of the best hedge funds. Our quarterly newsletter’s strategy selects 14 small-cap and large-cap stocks every quarter and has returned 373.4% since May 2014, beating its benchmark by 218 percentage points (see more details here).
10. AECOM (NYSE:ACM)
Number of Hedge Fund Holders: 41
AECOM (NYSE:ACM) is one of the best smart city stocks. On August 25, AECOM gained placement on the UK’s National Highways SPaTS3 framework, working in partnership with Arup.
The £495 million framework, concentrated among six providers and running through 2031, will supply National Highways with consulting and technical services to enhance safety and dependability on England’s 4,500-mile strategic routes.
This contract extends AECOM’s collaboration with National Highways, continuing the progress made under the prior SPaTS framework alongside Arup.
As per Richard Whitehead, the CEO of AECOM’s Europe & India operations:
“We will bring the full breadth of our engineering advisory expertise to this framework, supporting National Highways as it continues to enhance the efficiency, safety and resilience of England’s strategic road network.”
AECOM already works with the Department for Transport and National Highways on road projects across the country. The company will now use its technical skills to support sustainable roads and prepare England’s network for the future.
AECOM (NYSE:ACM) is a Dallas-based global infrastructure consulting firm that offers services including planning, design, engineering, and construction management, and also invests in real estate projects.
9. Hubbell Incorporated (NYSE:HUBB)
Number of Hedge Fund Holders: 42
Hubbell Incorporated (NYSE:HUBB) is one of the best smart city stocks. On August 12, Hubbell announced a definitive cash agreement to acquire DMC Power for $825 million, pending customary adjustments. DMC Power, previously owned by Golden Gate Capital, develops connector solutions for the utility and transmission market.
The acquisition bolsters Hubbell’s position in the utility sector, with demand for substation and transmission equipment rising, led by load growth, data center development, and infrastructure renewal. The company’s $1.34 billion in EBITDA in the last twelve months highlights its operational robustness.
DMC Power maintains manufacturing operations in Carson, California, and Olive Branch, Mississippi, supported by distribution centers in North America. DMC has a workforce of more than 350, and the business is expected to generate around $130 million in revenue and $60 million in EBITDA in 2026.
Hubbell President mentioned DMC Power’s swage connection system fits well with its current substation and transmission products, making its utility business stronger. DMC Power’s CEO, Tony Ward, added that working with Hubbell will speed up the use of swage technology in the industry.
Hubbell plans to pay for the deal using both cash and debt, and expects it will increase adjusted earnings per share by 2026. The deal should close by the end of 2025, depending on regulatory approvals.
Hubbell Incorporated (NYSE:HUBB) is an American producer and seller of electrical and utility products both locally and internationally. It operates through two divisions: Electrical Solutions for wiring, connectors, lighting, and controls, and Utility Solutions for power distribution, transmission, substations, and smart grids.
