What happened

Shares of edge computing specialist Fastly (NYSE:FSLY), telehealth company Teladoc Health (NYSE:TDOC), and e-commerce platform provider MercadoLibre (NASDAQ:MELI) were all hit hard on Wednesday. At their worst points during the trading day, the three stocks were down 5.2%, 4.5%, and 8.1%, respectively. By the time the market closed, they were down 4.2%, 4.2%, and 6.9%, respectively.

The three stocks were likely down due to a broader market pullback on Wednesday. The bearish day for the market hit high-growth tech stocks like these three companies particularly hard.

Person looking at charts on a laptop.

Image source: Getty Images.

So what

Capturing pessimism in the overall market on Wednesday, the S&P 500 fell about 0.9% and the tech-heavy Nasdaq Composite declined 1.7%. Many growth stocks like Fastly, Teladoc, and MercadoLibre, however, were down several percentage points or more.

The three stocks' declines come amid a report of higher-than-expected inflation on Wednesday. The closely watched consumer price index rose 6.2% from one year ago -- worse than the 5.9% consensus forecast from economists. Supply chain disruptions and semiconductor shortages and other issues caused by the pandemic have led to widespread economic challenges and, ultimately, higher prices across many items.

It's been a tough year for all three of these companies' stocks, with shares of Fastly, Teladoc, and MercadoLibre falling 44%, 31%, and 5%, respectively, year to date. These returns compare to a 24% gain for the S&P 500.

Now what

It's been a theme all year long for tech stocks to sell off whenever the inflation view worsens. Since growth tech stocks are priced largely for their estimated earnings far into the future, some investors may look for assets priced for more certainty in the near term as opposed to future cash flows when they believe inflation could become a problem.

For what it's worth, Fastly, Teladoc, and MercadoLibre have all seen their sales grow nicely. Fastly's third-quarter revenue grew 23% year over year as the company recovers from a recent outage that negatively affected customer usage (and ultimately revenue) on its platform.

Teladoc's third-quarter revenue increased 81% year over year, helped substantially by its Oct. 30, 2020 acquisition of Livongo Health. Visits, which do a better job of capturing its organic telehealth platform growth, rose 37% year over year to 3.9 million.

Finally, MercadoLibre saw its third-quarter revenue rise 73% year over year to $1.9 billion, fueled by a 59% increase in total payment volume and a 30% jump in gross merchandise volume over this same timeframe.

Despite how spooky inflation may seem, these three businesses have business models and market opportunities that will likely help them navigate an inflationary environment well.

This article represents the opinion of the writer, who may disagree with the “official” recommendation position of a Motley Fool premium advisory service. We’re motley! Questioning an investing thesis -- even one of our own -- helps us all think critically about investing and make decisions that help us become smarter, happier, and richer.