The young Magpies host their Black Cats counterparts at Whitley Park on Monday evening (kick-off 7pm GMT) aiming for back-to-back Premier League 2 victories following a 3-1 away win against Nottingham Forest a fortnight ago.
Stephenson, who has netted 10 goals in all competitions for United's second-string so far this term, is fully determined to come out on top against their North east neighbours.
"It's always a big game against Sunderland," the 18-year-old striker told nufc.co.uk. "Everyone in the team is always up for those kind of games - the massive games. It's probably our biggest game of the season.
"It's exciting. It's one of my favourite games of the season too because it's a local derby and you just want to win it so badly.
"It's a good test as well because there's a bit more pressure and intensity in the derby. It doesn't really matter about previous form - whoever wants it more will win on the day.
"We need to win those first battles and play our football. We have been preparing well for the game, making sure training is right, and trying to getting the best out of ourselves before Monday night.
"The day before or on matchday, we will tell the lads from outside Newcastle the importance of this game. They should know it is important for the club, especially for the Geordie lads in the team as well as the supporters."
Newcastle's youngsters have already tasted victory over Sunderland this term, as goals from Jay Turner-Cooke and Adam Wilson saw United's second-string come from behind to claim a 2-1 victory at the Stadium of Light in October.
Stephenson, who received a Premier League 2 Player of the Month nomination in August after scoring five goals in his opening three league fixtures, believes the squad can use the away win to their advantage ahead of hosting their local rivals.
The Blyth-born forward added: "We can take a lot of confidence from the recent game. We only played them a few weeks ago so it's not been that long. Hopefully we can win again, keep a clean sheet and win this game by a few more goals.
"We were one-nil down at half-time but we showed great character, stuck together and didn't allow ourselves to crumble. We stuck at it, eventually scoring two goals and came away with the win.
"We need to win games to get into the play-offs but we know we are good enough to do that. We need to be consistent with wins and need to stop conceding silly goals which we have done recently."
Supporters will be able to attend Monday's mini Tyne-Wear derby at Whitley Park, with season ticket holders gaining free admission otherwise it's £3 for adults and £1 concessions.
