For the first time in history, more people live in urban areas than rural areas. About 55 percent of the world’s population now lives in cities, where economic activity generates 86 percent of global GDP. By 2050, the number of people living in cities are expected to swell to include 70 percent of the world’s population.

With the population shift, metropolitan areas will be reaching tipping points in regards to infrastructure, housing, and the environment. They face increasing cybersecurity and terrorism risks. So-called "smart cities" are tackling these challenges by leveraging technologies like broadband internet, the internet of things (IoT) and the cloud.

A broad range of U.S. companies are positioned to benefit by offering services to cities where rapidly growing populations are straining resources and creating challenges to keeping municipal services running smoothly.

Cities like Singapore, London, New York, Paris and Tokyo can achieve 30 percent reductions in crime and energy use and 20 percent reduction in water loss and traffic delays by deepening investments in technology, according to a recent Bank of America report. In the U.S., the smart city market is expected to grow to as much as $1.6 trillion by 2020, triggering fast growth in areas like 5G mobile communications, artificial intelligence (AI), building automation, big data, bricks and steel infrastructure, and cloud. Companies involved in cybersecurity, electric cars, IoT, sensors, surveillance and telecom infrastructure should see demand rapidly increase with urbanization. (See also: 2016’s Most Promising Countries to Invest In.)

Multinational companies, especially those with aggressive technology strategies, have high exposure to these smart cities. Choosing the right investments from this group should give investors a great opportunity to capitalize on the challenges of increasing populations. Bank of America has identified 250 stocks that have exposure to smart cities, and has ranked them according to low, medium and high exposure. Below we look at the top U.S. company picks in each category.

Information and Communications Technology (ICT) Infrastructure

International Business Machines Corp. (IBM), with a market cap of $164.2 billion, operates in more than 170 countries manufacturing computer hardware and software. Constantly innovating new products and discarding outdated strategies, IBM has high exposure to smart cities, according to Bank of America. (See also: IBM Launches Enterprise-Ready Blockchain Service.)

American Tower Corp. (AMT), owner and operator of infrastructure for wireless broadcast communications, is also well positioned to leverage urban population explosions in areas that are rapidly adopting technologies. The Boston-based company, with a market cap of $49.8 billion, operates about 100,000 different communications sites in 13 countries. And technology giants Intel Corp. (INTC​) and Cisco Systems Inc. (CSCO​), which provide network connectivity services around the globe, are also very well positioned in smart cities.

High-Tech Buildings

Two U.S. companies that have high exposure to demand for buildings that are outfitted in modern technology, called “intelligent buildings,” are IBM and Cisco.

General Electric Co. (GE) and Honeywell International Inc. (HON), which provide building automation systems, have medium exposure to smart cities, according to Bank of America. General Electric has a market cap of $260.8 billion, and Honeywell has a market cap of $97.1 billion. (See also: Manufacturing Giants Back U.S. Tax Reforms.)

Smart Homes

Alarm.com Holdings Inc. (ALRM​), a Vienna, Virginia-based company that provides cloud-based services for home monitoring, is the only company in Bank of America’s “smart home” category that has high exposure to smart cities. Last year, Alarm.com integrated its platform with both Apple Inc.’s (AAPL​) Apple TV and Amazon.com Inc.’s (AMZN​) Echo.

Amazon.com, Alphabet Inc. (GOOGL​) and Apple, with their myriad of popular high-tech consumer products, have medium exposure to smart cities. (See also: Google Releases Amazon Echo Competitor Google Home.)

Safety and Security Platforms

No U.S. firm had high exposure to high-tech safety and security needs, but Bank of America identified several with medium exposure: Barracuda Networks Inc. (CUDA​), Palo Alto Networks Inc. (PANW​) and Juniper Networks Inc. (JNPR​), VMware Inc. (VMW) and Symantec Corp. (SYMC​).

These firms have significant business worldwide in cybersecurity efforts expected to be in higher demand with the rise of urbanization. For example, Barracuda provides security networks and products that protect email and web surfing against viruses and spyware, among other threats. The Campbell, California-based company is transitioning to a cloud-based model that’s among the fastest in the IT landscape, according to Baird. (See also: Barracuda Networks Rises on Robust Q3.)

Innovative Energy Solutions

First Solar Inc. (FSLR​), with a market cap of $3 billion, and SunPower Corp. (SPWR​), with a market cap of $876.1 million, both have medium exposure in solar energy, which is on track to become the main source of energy production by 2050. First Solar has a massive presence in utility-scale energy, and SunPower is a dominant player in residential and commercial solar energy products. (See also: A Look at Solar Energy Earnings.)

In the renewable energy and utilities sector, NextEra Energy Inc. (NEE), Edison International (EIX) and PG&E Corp. (PCG) are among U.S. firms with medium exposure to smart cities.

Efficient Urban Mobility

Tesla Inc. (TSLA​), the newest American automaker, is the only U.S. company with high exposure to the "smart mobility" trend. With a market cap of $42.4 billion, the Palo Alto, California-based company has sold more than 186,000 electric vehicles worldwide as of December 2016.

General Motors Co. (GM) and Ford Motor Co. (F), the first and second largest automakers in the U.S. respectively, both offer hybrid models including pickup trucks. Their high-tech car models help give them medium exposure to increased demands in efficient transportation, according to Bank of America. (See also: General Motors Vs. Ford: Which is the Better Buy?)

Healthcare, Waste and Water

In healthcare, Intuitive Surgical Inc. (ISRG​), with more than 1,240 da Vinci Surgical Systems installations that allow for robotic control during surgeries, has medium exposure to smart cities. The Sunnyvale, Calif.-based company has a market cap of $27.8 billion. Intuitive Surgical stock is up 28.8 percent the past year, tapping fresh all-time highs Monday.

In the water and waste sector, Ecolab Inc. (ECL), a water and hygiene technology provider with a market cap of $36.7 billion, and American Water Works Co. (AWK), a public utility company in the U.S. and Canada with a market cap of $13.6 billion, also have medium exposure to smart cities.

Want to learn how to invest?

Get a free 10 week email series that will teach you how to start investing.

Delivered twice a week, straight to your inbox.