Generation Alpha: Young Consumers With Money (and NFTs)

Born between 2010 and 2024, Generation Alpha is the generation of digitally savvy kids after Generation Z. They are aged 8 to 15 years and have grown up almost exclusively using phones and tablets. Yeet, hundo, and oof are some of the common words in their vocabulary.

According to Mark McCrindle and Ashley Fell’s report, Generation Alpha is expected to grow to 2 billion or more young people by 2025. This generation, according to Fell, could turn out to be more resilient due to the challenges they have faced, such as the pandemic and recession.

Diversity and Transparency

In terms of work ethics, the preceding Generation Z has been vocal about diversity and transparency in their workplaces. Millennials (Generation Y) are also not far behind in their demand for inclusion in the workplace. The United States is already seeing this trend in action.

Gen Alpha, much like Gen Z, won’t just work for the paycheck, but rather will look for jobs that align with their values and can also help make a positive impact in the world. 

Green Practices

This generation also cares about the environment and their carbon footprint, opting for green energy practices. Tech companies are already working towards creating better social practices rather than just focusing on profits. Amazon's (AMZN) former CEO Jeff Bezos, for example, pledged that the company would meet the goals of the Paris climate agreement and go completely carbon neutral by 2040. After Satya Nadella, CEO of Microsoft (MSFT) announced a cloud computing contract with Chevron and Schlumberger, the employees demanded the company be more conscious of its carbon footprint. 

Other tech firms such as Apple (AAPL), Dell (DELL), Lenovo (LNVGY), Cisco (CSCO), and Intel (INTC) are also investing in sustainability and ethical practices. Google (GOOG) is offering tools to help people make more sustainable choices. Google Flights, for instance, shows carbon emissions per seat for every flight, which helps people find options with minimal carbon footprint.

Technologically Advanced

Gen Alpha will expect to work in technologically advanced environments. With AI adoption on the rise, the workers of this generation will be attuned to automation in their work habits. They will be agile, smart, and productive. The use of AI in their everyday tasks will be more common. Gen Alpha will use tools such as Zoom (ZM), Slack, ChatGPT, Airtable, NapoleonCat, and more.

Investing Prospects: Green Energy, Metaverse, Crypto, and NFTs

Gen Z and Gen Alpha have grown up in a climate that holds weight on the importance of sustainability in businesses and society. In fact, many are already contributing to clean energy initiatives. Kids as young as Greta Thunberg have challenged world leaders to take action against the impacts of fossil fuels and global warming. Gen Alpha will follow Gen Z’s footprints in making the world more climate-conscious. Many companies today are adopting clean energy initiatives, with trends such as ESG (environmental, social, and governance) becoming the new norm in corporate sustainability.

Enphase Energy Inc. (ENPH) is a California-based solar company that produces and designs micro inverter-based solar and battery systems. Goldman Sachs maintains a buy recommendation, while Barclays has an equal-weight recommendation for ENPH.

As one of the largest investors in renewable energy, Brookfield Renewable Partners (BEP) is at the forefront of generating clean energy. The company has a diverse set of energy sources – hydroelectric dams, wind power, and solar power. Although the stock price has declined over the last two years, the record peak of $60 in 2021 shows potential in the future. The current dip can be a great buying opportunity for investors at this time. As of Jul 19, the stock closed at $29.93. The one-year price target for BEP is $35.86.

While investing in companies that are ethical or green may seem like the right thing to do, these stocks can be a tricky business because the sector benefits heavily from government subsidies and tax incentives, and in a matter of time, these incentives can be pulled out and pooled into another initiative.

Being digitally savvy, Gen Alpha is already exposed to the concept of metaverses and cryptocurrency. This generation will utilize virtual online spaces to interact with others. Piggybacking on the desire for this generation to adopt ethical practices, they will lean towards blockchain-backed technologies. The desire to make easy money – as seen in Gen Z – will also be quite the case with Gen Alpha. This generation will lean towards cryptocurrency and NFTs to make quick bucks.

While still a fledgling economy, the sale of digital art, trading cards, and virtual land — in other words, NFTs – has seen considerable growth in the last few years. In 2021, the NFT sales totaled $25 billion. Funko (FNKO), Liquid Media (YVR), Jiayin Group (JFIN), and WISeKey (WKEY) are some of the NFT stocks that may have potential in the future.

However, NFTs are still unregulated, which makes them a high-risk investment. Until Securities and Exchange Commission (SEC) provides guidance on the regulation of NFTs and other digital assets, investors won’t know if it's safe to play in this field. 

It is established that Gen Alpha spends a lot of time in the digital world; however, this generation will also seek real-life social interactions outside of social media platforms. Having spent a large part of their lives cooped up in their houses due to the pandemic, this generation will crave time outside.

They will look for local events, seek travel opportunities, and engage in social activities. They will use apps such as Eventbrite (EB), Viator, Stubhub, Alltrails, Hopper, and more.

Based on studies, we can predict the potential behaviors of Gen Alpha; however, it’s unfair to make sweeping assumptions about a whole generation. What the kids of this generation may end up doing also depends on many external factors such as socio-economic conditions and the political climate of the time. Still, keeping up with what’s in fashion for Gen Alpha can help investors put their bets in the right place.

The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.

Other Topics

Stocks Careers Sustainability