Smart home stocks represent a unique opportunity for investors to engage with the growing smart home sector, facilitating involvement in cutting-edge residential technology. Consequently, more than 130 million households are already equipped with at least one smart speaker and forecasts point to a surge in the smart home market, with the foundation set for significant long-term expansion.

Furthermore, Statista’s forecasts show the smart home market expanding at an annual rate of 11.43% through 2028, with the market expected to be worth $231.6 billion. In light of this, investors should gauge the attractiveness of smart home stocks with significant growth potential, blending insights and expectations for strategic investments.

With that said, here are three top smart home stocks positioned to excel in their niche, offering healthy-long term upside for those willing to stomach the risk.

NRG Energy (NRG)

NRG Energy (NYSE:NRG), a giant in the energy space, has made substantial inroads into the smart home sector. Its acquisition of Vivint Smart Home (NYSE:VVNT) paves the way for a unified home services platform, advancing NRG’s goal for consumer-focused growth. This strategic move introduces an integrated smart home ecosystem designed to transform home management, aligning perfectly with NRG’s vision for innovative, consumer-centric solutions.

Additionally, NRG’s acquisition of Vivint expands its customer base significantly, serving approximately 7.3 million clients across North America. This expanded reach creates ample cross-selling opportunities, leveraging market-leading brands and complementary sales channels.

Given the market headwinds, though, NRG has posted subpar earnings in the past few quarters. However, its significant Texas customer base, attractive valuation, and cost-cutting initiatives hint at enhanced earnings potential. Consequently, Quant analysts have assigned NRG a ‘strong buy’ rating, reflecting confidence in its strategic direction and growth potential and signaling a promising future ahead.

Amazon (AMZN)

Amazon (NASDAQ:AMZN) has been effectively transforming the smart home market through its innovative integration of the Echo devices and Alexa virtual assistant. Echo devices are essentially central hubs controlling multiple smart home gadgets, leveraging Alexa’s voice commands to provide a seamless experience. This synergy pushes the boundaries of what smart homes can achieve, making advanced technology accessible to a wide audience. According to press release last year, over half a billion Alexa-enables devices have been sold worldwide.

Moreover, Amazon is looking to expand its presence in the smart home space through strategic acquisitions. Topping the list is the smart Roomba vacuum creator iRobot for $1.7 billion,. Moreover, it also acquired video doorbell pioneer Ring and security camera innovator Blink, boosting its smart home device portfolio further. Hence, Amazon’s relentless push for innovation and expansion underscores Amazon’s ambition to redefine smart home interactions, securing its place as an industry titan.

Alphabet (GOOG, GOOGL)

Alphabet (NASDAQ:GOOG, NASDAQ:GOOGL), is another leading tech giants, that’s driving the smart home market forward. Recently, its Google division breathed new life into the Google Home app, introducing 18 groundbreaking automation features. This upgrade significantly boosts user interaction with smart home devices, underscoring the company’scommitment to innovation.

Moreover, Alphabet’s strategic merger of Nest with Google aims to enrich its smart home offerings, uniting Nest’s vision for smarter, safer homes with Google’s AI prowess. This collaboration promises enhanced, cost-efficient living through advanced technology, leveraging the synergy between Nest and Google’s hardware teams for a more innovative future.

Financially, Alphabet stands out, with its stock price soaring 52.03% last year on the back of the AI buzz. Revenues in its most recent quarter, climbed 13.49% year-over-year to $86.31 billion. Moreover, its EPS of $1.64, surpassed expectations by four cents, thereby attracting a ‘strong buy’ rating from TipRanks analysts, projecting an 18.82% upside potential.

On the date of publication, Muslim Farooque did not have (either directly or indirectly) any positions in the securities mentioned in this article. The opinions expressed in this article are those of the writer, subject to the InvestorPlace.com Publishing Guidelines