What happened

Growth stocks were among the hardest hit in Monday's sell-off regardless of which sector they belonged to. Plug Power (PLUG -4.91%), Bloom Energy (BE -3.37%), and ChargePoint Holdings (CHPT -4.75%) were three such clean energy stocks that got hammered and plunged 12.5%, 14.1%, and 16.4%, respectively, near their lowest points during the day today.

Each of these companies operates in a high-potential industry, with the Biden administration also announcing big plans for hydrogen as well as the electric vehicle (EV) industries in just the past few days. Yet when fear strikes, investors often ignore the bigger picture and follow the herd.

So what

Inflation in the U.S has hit 40-year highs, triggering fears that the Federal Reserve could resort to more-aggressive interest rate hikes than previously expected.

Investors are now trying to assess how the Fed will react to sky-high inflation at its meeting scheduled for Tuesday. The Consumer Price Index rose by 8.6% year over year in May, its steepest increase since December 1981. Rising fuel and food prices are largely to blame.

The markets fear the Fed's interest rate increases could now be bigger and quicker, which could trigger a recession.

If the economy slows down, Plug Power, Bloom Energy, and ChargePoint might have a tougher time growing their sales. That's scary since these are all loss-making companies, and investor conviction hangs precariously on top-line growth for such businesses.

Worse yet, high interest rates add to the costs of borrowing, meaning the path to profitability for these growth companies could stretch much longer if the U.S. slips into a recession.

Plug Power, for example, held long-term debt worth nearly $105 million as of March 31, and incurred a loss of roughly $157 million in the first quarter. Bloom Energy had $280 million in long-term debt as of March 31, and reported a loss of $78 million for the quarter. ChargePoint held debt worth $294 million as of April 30 and incurred a net loss of $89 million during that quarter.

Now what

Investors' fears about growth stocks amid risks of a recession aren't entirely unwarranted, but it's also true that shares of Plug Power, Bloom Energy, and ChargePoint have already lost significant value in recent weeks.

Plug Power, for example, has plunged 50% since the beginning of April through the time of this writing. The company, though, recently bagged its largest electrolyzer order yet and a deal to build a green hydrogen plant in Europe, a region striving to switch to clean energy in a bid to reduce dependence on fossil fuels. Plug Power expects its revenue to more than triple to $3 billion by 2025 from its 2022 estimate.

Bloom Energy has even bigger plans for annual revenue worth a whopping $15 billion to $20 billion by 2031, up from the $1 billion it generated last year. For that matter, Bloom Energy's solid-oxide fuel cell energy servers that can supply uninterrupted power have already found takers in some of the world's largest organizations.

Both Plug Power and Bloom Energy are bets on green hydrogen that's now considered to be an important source of clean energy that could help economies decarbonize. ChargePoint, meanwhile, is a play on one of the fastest-growing industries today, EVs, as the largest EV charging company in North America.

With the Biden administration all set to pump billions of dollars into building green hydrogen hubs and a 500,000-charger EV charging network in the U.S. under the bipartisan infrastructure bill, shares of Plug Power, Bloom Energy, and ChargePoint could soon jump back onto the radar of long-term investors.