Given the S&P 500's 20% decline this year, it's fair to say that there may be some opportunities to pick up stocks with excellent long-term growth prospects. One good way to find such stocks comes from looking at renowned investors, in this case, Cathie Wood and her ARK Invest ETFs. Wood does invest in many small-cap technology stocks, but Deere (DE -0.14%) and Caterpillar (CAT 1.56%) are slightly different -- heavyweight industrials using technology to improve their offerings. Moreover, those changes result in tangible improvements in their fundamentals and operating metrics. Here's the how and why. 

John Deere

Deere and Caterpillar are in the ARK Autonomous Technology & Robotics ETF. Deere's inclusion comes down to its embrace of smart farming, or precision ag technology. That embrace has made smart farming an integral part of Deere's agricultural operations. 

Crop farming is an industry traditionally characterized by decisions made under uncertainty. For example, when should a farmer prepare the soil, and what with? What crop should be planted, and how best to nurture it? When to harvest it? How best to service agricultural equipment needed at critical times? All these issues impact crop yields and, ultimately, farmers' income. 

The good news is Deere's precision ag technologies are here to help. AutoTrac provides automated guidance for tractors, therefore increasing productivity. Meanwhile, AutoPath uses data gathered from planting to spray and harvest crops more accurately. Deere's connected support helps farmers receive remote support in servicing equipment. Harvest Profit provides software tools to help farmers improve profitability on a field-by-field basis. ExactRate and ExactApply make fertilizer application more precise, and See & Spray uses camera technology to only spray targeted weeds with herbicides. ExactEmerge increases the accuracy and precision in planting. Meanwhile, Deere continues to invest heavily in creating autonomous tractors.

The benefits of Deere's 20-year investment in technology can be seen in its stock performance -- $10,000 invested in Deere 20 years ago would now be worth $170,000. It also helps to increase customer loyalty and improve aftermarket revenue, and its software solutions give added value to its equipment. For example, management recently said that the take-up rate on ExactApply on its sprayers is now 65%, and for ExactEmerge on its planters its 60%. Both are clear demonstrations of how its differentiated precision ag solutions make its overall product more attractive. 

Moreover, it is enhancing Deere's earnings quality and giving it an edge over its rivals. As such, Deere deserves a place in the portfolio of any investor who's excited about autonomous technology. 

Caterpillar 

There's no way to hide that Caterpillar is a highly cyclical company. For example, when construction markets turn down, Caterpillar's construction equipment machinery sales get hit. Similarly, when mining commodities (such as iron ore and copper) turn down, then resource customers will hold back investment in mining machinery, and it's a similar story for Caterpillar's oil and gas equipment sales. 

As such, Caterpillar's revenue and earnings will always be subject to volatility governed by end market conditions. 

CAT Operating Income (TTM) Chart

Data by YCharts

However, management is seeking to reduce the volatility in its earnings by increasing its services revenue. In fact, its aim is to double its services revenue from $14 billion in 2016 to $28 billion in 2026. Services revenue tends to hold up stronger in a slowdown, as equipment users are more willing to hold back on new equipment purchases, but are unable to avoid servicing equipment in use. Similarly, running older equipment longer tends to lead to more need for servicing. 

A big part of Caterpillar's effort to increase services sales comes from its investments in digital technology. For example, through the use of advanced telematics and machine learning Caterpillar can monitor the condition of equipment and ensure the adequate and timely servicing of it. In addition, Caterpillar's online platforms can help customers better source and order replacement parts from Caterpillar's dealers. 

As such, Caterpillar's earnings and cash flows are becoming less cyclical. As a result, management believes its free cash flow through the cycle will move between $4 billion to $8 billion. The lower end of that range is significantly above the current dividend payout of $2.4 billion. It implies that Caterpillar can continue to grow its dividend (current yield 2.8%) even if the economy slows down further in 2023.

Stocks to buy

Although Wood is known for investing in smaller companies with disruptive technology, both of these companies are large entities using disruptive technology to improve their offerings and grab market share. In doing so, Deere and Caterpillar are improving their underlying profitability and growth prospects.