By Al Root and George Glover

One of Blue Origin's rockets blew up late Thursday, bursting into an enormous ball of flames during a test, in a major setback for Jeff Bezos' space company.

It's a reminder that creating space technology is hard. The incident also creates problems for people who need Blue Origin's capacity to execute on their business models, including Amazon.com and AST SpaceMobile.

The New Glenn rocket exploded on Thursday evening. The reason isn't clear yet. "We experienced an anomaly during today's hotfire test," said the company in a statement. "All personnel have been accounted for. We will provide updates as we learn more."

AST stock was down 13% in premarket trading, while S&P 500 and Dow Jones Industrial Average futures were both up about 0.1%. Amazon.com stock was down 1%.

Both companies are using Blue Origin to put communications satellites in space. The exploding rocket represents cost delays.

In the case of AST, it pushes out the time to realize its billion-dollar sales backlog. That business is coming from wireless network operators, including Verizon Communications and AT&T.

Amazon is trying to get enough satellites into space to avoid losing its wireless spectrum licenses. Amazon is supposed to have thousands of satellites in orbit this year and more than 3,000 by 2029. That isn't going to happen, necessitating an extension request by Amazon to the FCC.

Launch capacity is getting tight. United Launch Alliance, a 50/50 joint venture between Boeing and Lockheed Martin, uses the same engines for its Vulcan rocket. That rocket might face delays while Blue Origin investigates the explosion.

Of course, there is SpaceX, which handles more than half of all orbital launches worldwide. Its consistency and experience with launch represent a substantial competitive moat that others are struggling to overcome.

SpaceX is on the cusp of a record-setting IPO that could value the company at $2 trillion. The Blue Origin hiccup means less competition for SpaceX's Starlink space-based broadband product, which AST and Amazon are trying to replicate. Still, a single rocket accident should only represent a monthslong delay. SpaceX's valuation will continue to depend on its AI plans and Elon Musk, who wished Blue Origin well after the incident.

The launch might serve as a catalyst to take some profits in space stocks, which have run up in anticipation of the massive SpaceX IPO. Rocket Lab stock was down almost 6% in premarket trading. Coming into Friday trading, shares were up 92% over the past month.

Shares of Firefly Aerospace, Intuitive Machines, and Voyager Technologies were down 1%, 6%, and 6%, respectively.

At first glance, not all the moves make sense. Rocket Lab and Firefly, for instance, have launch capabilities, which should be more valuable as other companies struggle to reach space consistently. Still, the stocks are down.

The stock market, however, is always difficult to predict. And recent trading in space stock has been wild.

Write to George Glover at george.glover@dowjones.com

This content was created by Barron's, which is operated by Dow Jones & Co. Barron's is published independently from Dow Jones Newswires and The Wall Street Journal.

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May 29, 2026 07:28 ET (11:28 GMT)

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