Apple Inc.

This New CNBC Stock Index Will Track Shares Integral to the Lives and Careers of Younger Generations

Shannon Stapleton | Reuters
  • The CNBC Next Generation 50 index follows key stocks for millennials and Generation Z.
  • Crypto, clean energy, fintech, transportation and dating stocks are on the list.
  • This equal-weighted basket of stocks is up more than 40% so far in 2021.

CNBC is launching a new index focusing on younger people, younger workers and younger investors.  It is called the CNBC Next Generation 50 index.

The index will track 50 equal-weighted stocks integral to lives and careers of millennials and those from Generation Z.

We tried to create a list of stocks that were diverse in size and growth prospects and tried to avoid many (but not all) companies that have already become major household names.

CNBC compiled the index after weeks of research from the networks' younger reporters and producers working on both the television and digital sides of the business and with a final vetting from CNBC's stock expert, Jim Cramer, a former successful hedge fund manager.

As a reference point, after compiling the basket of stocks, CNBC's Data and Research team backdated the index to the start of 2021. Since then it is up more than 40%.  However, it has also been a victim of the recent uncertainty and volatility and has dropped 17% in the last month.

Big holdings in crypto and fintech

Forty-eight of the issues in the index are stocks and two are crypto assets.  Because of the immense popularity and possible future utility of bitcoin and Ethereum, both are directly in the CNBC Next Generation 50. 

Coinbase is also listed as are Affirm, PayPal, Lemonade, Upstart Holdings and Square, which are different kinds of fintech stocks.

The index also covers stocks that enable the modern day workforce to work more efficiently and securely.  That includes DocuSign, Wix, Zoom, Palo Alto Networks and Crowdstrike.

 A few mega cap stocks like Amazon, Alphabet and Apple are on the list.   

Jim Cramer
Scott Mlyn | CNBC
Jim Cramer

In his note to members of the CNBC Investment Club newsletter last week Jim Cramer and his team made the case for Apple, which was up amidst last week's carnage by more than 3% and has withstood the months' volatility, rising 7% saying "companies with strong balance sheets, healthy dividend payments and consistent share repurchase programs and typically ones that can withstand and find support in volatile markets." 

Cramer went on to credit Apple's recent $20 billion stock buyback saying the stock has been seen as a "safe-haven" by investors leading to its outperformance.

Entertainment and the future of travel

Entertainment names in the index include another mega cap stock Netflix, along with Roblox.

Our travel and transportation stocks include Airbnb, Uber, Lyft, Fisker, Lucid and Tesla

In an interview last week on CNBC Pro Talks, Cathie Wood, who manages ARK Invest, said she believes despite Tesla's big run the company is poised for growth.  "Tesla's in the pole position to become the autonomous taxi network, certainly in the US and perhaps elsewhere as well," said Wood.

Catherine Wood, chief executive officer of ARK Investment Management LLC, speaks during the Milken Institute Global Conference in Beverly Hills, California, on Monday, Oct. 18, 2021.
Kyle Grillot | Bloomberg | Getty Images
Catherine Wood, chief executive officer of ARK Investment Management LLC, speaks during the Milken Institute Global Conference in Beverly Hills, California, on Monday, Oct. 18, 2021.

On the health side, vaccine innovator Moderna and Teladoc made the list.  In that same CNBC Pro Talks interview, Wood also made a case for Teladoc, which she owns and has defended despite the fact the stock is down 70% since it's February high of $308 a share. 

Wood said, "We see a company in Teladoc that is going to be really directing, directing patients and doctors and hospitals and insurance companies in what is becoming a very complicated and exciting world."

From the cannabis sector we listed Tilray and Canopy Growth.  Renewable energy is a big part of the future and our index includes Enphase, PlugPower and Cameco.

Our food listings include Chipotle, newly listed Dutch Bros, which is an Oregon based coffee company, and DoorDash.

Dating sites Bumble and Match both made the list, as did a company that caters to pets and their owners, Chewy.

We had to make some tough decisions including leaving stocks like Salesforce, Nvidia and Robinhood off the list for now, knowing that all three have become integral to the way younger people work, play and invest.

But we do plan to re-balance several times a year and it's likely that those stocks, among many others, will continue to play a large role in our conversations. 

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