Space stocks slide after Blue Origin rocket explosion rattles investors

Space related stocks fell sharply on Friday after a Blue Origin rocket exploded during a prelaunch engine test in Florida, raising fresh concerns about risks facing the fast growing commercial space industry.

The incident happened at Cape Canaveral Space Force Station during a hotfire test of Blue Origin’s New Glenn rocket, a heavy lift launch vehicle developed by the company founded by Jeff Bezos. The rocket is expected to play a key role in Amazon’s plans to launch internet satellites into orbit and compete directly with Elon Musk’s SpaceX.

Blue Origin described the explosion as “an anomaly” during testing, while Bezos later confirmed in a post on X that all personnel were safe.

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“Very rough day,” Bezos wrote. “It’s too early to know the root cause but we’re already working to find it. We’ll rebuild whatever needs rebuilding and get back to flying. It’s worth it.”

The explosion sent shockwaves through the space sector, wiping out part of the strong gains recorded by space related companies in recent weeks. Investor optimism had been boosted by growing excitement around the expected SpaceX initial public offering.

Rocket Lab shares dropped 7.5 percent, while AST SpaceMobile plunged 16 percent. Intuitive Machines lost 8.3 percent and Redwire fell 9.3 percent. Firefly Aerospace declined 7 percent, Voyager Technologies slipped 8.2 percent, and York Space Systems dropped 5.3 percent.

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The Procure Space ETF, which trades under the ticker UFO and tracks space focused companies, also fell about 6 percent following the incident. Despite the decline, the fund remains higher for the year after rallying on renewed investor interest in the private space industry.

According to Business Insider, the selloff reflects growing investor sensitivity to setbacks in the commercial space race, where launch failures and testing problems can quickly affect confidence across the sector.

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Blue Origin has been positioning New Glenn as a direct rival to SpaceX’s Falcon Heavy rocket. The company is also seeking a larger share of government and commercial launch contracts as competition intensifies in the global space industry.

The cause of the explosion remains under investigation.