What happened

Hydrogen and fuel cell stocks crashed on Tuesday due to looming global concerns and their potential impact on the growth of companies just starting out. Here's how some of the hydrogen stocks were faring as of 12:10 p.m. ET today:

So what

Two major developments triggered a sell-off in stocks on Tuesday.

First is the new COVID-19 variant, omicron, that's touted to be a lot more infectious and dangerous than previous coronavirus variants. Healthcare giants are even warning about a drop in the effectiveness of the COVID vaccines against the omicron variant. Several nations are already imposing flight bans and restrictions to prevent the spread, triggering renewed fears of global lockdowns.

Most of the hydrogen and fuel cell stocks are in their early growth phase as adoption of green hydrogen as an alternative fuel source is only just getting started. For such companies in particular, lockdowns and the consequential slowdown in the economy don't bode well.

A worried person studying a falling graph on a laptop.

Image source: Getty Images.

Plug Power, for example, is rapidly expanding its footprint. Just this morning, it finalized a 50/50 joint venture (JV) with Acciona Energia, a European utility. Dubbed AccionaPlug, the JV aims to develop and operate green hydrogen projects in Spain and Portugal and achieve "substantial market share" in green hydrogen in both countries by 2030. Plans include starting the first plant by 2030 and producing more than 100 tons of green hydrogen per day in the medium term.

This JV comes right when the European Union is pumping billions of dollars into green hydrogen. In a speech on Nov. 29, the president of the European Commission highlighted how nearly half of the total hydrogen projects launched globally this year are in Europe.

The JV could give Plug Power headway into a crucial hydrogen market, but all of those growth projects could stall if omicron forces nations to shut down again.

For that matter, Bloom Energy is also eyeing international markets and announced a collaboration this morning to supply its fuel-cell energy servers in the U.K., barely four weeks after announcing a megadeal in South Korea that could generate $4.5 billion in revenue over three years.

PLUG Chart

PLUG data by YCharts.

To add fuel to investors' fears, the Federal Reserve confirmed today that the omicron variant is a potential threat to the U.S. economy, and with inflation already inching higher, the Fed might start increasing interest rates earlier than expected. Money typically flows out of stocks into bonds in an environment of higher interest rates, with growth stocks almost always taking the hardest hits.

Now what

Shares of Nikola, which is building hydrogen-powered fuel-cell electric vehicles, have already been under tremendous pressure lately, so the fact that the stock is falling further alongside the broader market isn't surprising.

The sharp declines in shares of Bloom Energy and Plug Power, though, could be seen as an opportunity by some investors, given Bloom Energy's compelling renewable-product offering that's already used by top global companies, and Plug Power's growth moves.

These are still loss-making companies, though, and still in their early stages of growth, which is why their stocks could remain volatile despite the strong growth prospects in green hydrogen.

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.