New Glenn’s fourth flight was meant to carry Amazon’s Project Kuiper satellites into orbit. Instead, it exploded on the launchpad at Cape Canaveral on the evening of May 28 during a hotfire test.By the time markets opened the following morning, the damage had spread well beyond Blue Origin’s hangar.What happened at Cape Canaveral and what Blue Origin saidBlue Origin’s New Glenn rocket exploded during a hotfire test at Launch Complex 36 in Cape Canaveral on May 28. No satellites were on board and all personnel were safe. The company described the incident as an “anomaly” and said an investigation would follow.It was the second major setback for New Glenn in less than two months. The rocket’s third mission had suffered an upper stage anomaly only weeks earlier, according to Stocktwits.More Tech Stocks:Morgan Stanley sets jaw-dropping Micron price target after eventNvidia’s China chip problem isn’t what most investors thinkQuantum Computing makes $110 million move nobody saw comingTwo failures that close together are not just operational setbacks. They raise questions about the rocket’s reliability at a moment when Blue Origin had been positioning New Glenn as a credible competitor to SpaceX’s Falcon 9.Jeff Bezosaddressed the incident on X. “Very rough day, but we’ll rebuild whatever needs rebuilding and get back to flying,” he wrote. “It’s worth it.” NASA Administrator Jared Isaacman also posted that the agency was aware of the anomaly at Launch Complex 36 and would work with its partners to support a thorough investigation.How space stocks reacted and which names were hit hardestThe reaction in public markets was immediate and broad. AST SpaceMobile was the hardest hit, falling as much as 18% in early Friday trading before closing down 14.79% at $113.41, according to The Motley Fool.The selloff spread across the sector. Rocket Lab slid more than 6%. Planet Labs and Intuitive Machines each fell more than 5%.Voyager Technologies also dropped more than 5%. The Procure Space ETF, which tracks the broader industry, was on pace for its worst session of the year.One notable exception: Virgin Galactic rallied 11% as traders positioned for a potential customer shift away from Blue Origin’s currently paused space tourism program, according to 247 Wall St.
Blue Origin’s New Glenn rocket exploded during a hotfire test at Launch Complex 36 in Cape Canaveral on May 28.Carrillo/Getty Images
Why AST SpaceMobile was hit harder than the restASTS has a specific and direct exposure to Blue Origin that most of its peers do not share. The company signed a multi-launch agreement with Blue Origin in 2024 for future Block 2 BlueBird satellite deployments. With New Glenn now grounded pending an investigation, those launches are in limbo.Deutsche Bank said AST SpaceMobile cannot meet its goal of approximately 45 satellites in orbit in 2026 without Blue Origin shouldering some of the launch load, and that near-term New Glenn launches are now highly uncertain, according to The Motley Fool. The bank also downgraded the stock and cut its price target to $106.The commercial constellation launch that ASTS had targeted for the fourth quarter of 2026 could now slip into Q1 2027, according to Investing.com. Amazon’s Project Kuiper Leo satellite deployment is also delayed, as the New Glenn rocket was meant to carry the Kuiper satellites into orbit at a later date.ASTS does retain a partial buffer. BlueBirds 8, 9, and 10 have already arrived at Cape Canaveral and are scheduled for a mid-June Falcon 9 launch, providing some near-term momentum independent of Blue Origin’s timeline, according to Stocktwits. But reaching 45 satellites this year on SpaceX alone is a significantly harder path.Key figures on the Blue Origin explosion and market reaction:Explosion: Blue Origin’s New Glenn rocket exploded during a hotfire test at Launch Complex 36, Cape Canaveral, evening of May 28; described as an “anomaly”; all personnel safe; fourth planned mission was to carry Amazon Project Kuiper satellitesSecond failure: this marks New Glenn’s second major setback in less than two months after an upper stage anomaly on its third mission, according to StocktwitsASTS impact: shares fell as much as 18% Friday, closing down 14.79% at $113.41; Deutsche Bank downgraded and cut target to $106; 45-satellite 2026 goal now at risk, according to The Motley FoolBroader selloff: Rocket Lab down more than 6%; Planet Labs and Intuitive Machines each down more than 5%; Voyager Technologies down more than 5%; Procure Space ETF on pace for worst session of 2026, according to Yahoo FinanceException: Virgin Galactic rallied 11% on potential customer shift from Blue Origin’s paused space tourism program, according to 247 Wall St.ASTS partial buffer: BlueBirds 8, 9, and 10 at Cape Canaveral for mid-June Falcon 9 launch; Q4 2026 constellation target now likely slipping to Q1 2027, according to Investing.comWhat this means for investors in space stocks and what to watch nextThe explosion is a reminder of something space investors know, but can forget during rallies: this sector is operationally unforgiving. ASTS had gained more than 82% in the months leading up to Friday’s drop.The market had been pricing in a relatively clean path to 45 satellites. That path just got harder.The key variables to watch are simple. Can Blue Origin complete its investigation quickly and credibly? Will the FAA clear New Glenn for a return to flight on a timeline that preserves any part of ASTS’s 2026 launch schedule?A clean Falcon 9 launch in June could stabilize ASTS sentiment quickly. A second problem of any kind would likely accelerate the selloff.For broader space stocks, the question is whether Friday’s move is a single-session reaction or the beginning of a wider reassessment. The sector had been rallying partly on anticipation of SpaceX’s planned IPO and the broader commercialization story.Blue Origin’s second failure in two months does not invalidate that story. But it does raise the bar for proof that commercial space execution is catching up to commercial space ambition.Related: Jeff Bezos sends stunning message to American workers