NCCapital

Space stocks dropped sharply on Friday after Blue Origin’s New Glenn rocket exploded during a test on a Florida launchpad. The incident served as a stark reminder of the high risks in the space industry.

Investors have been pouring into space-related stocks ahead of SpaceX’s anticipated IPO. The New Glenn rocket was expected to support future satellite launches, including Amazon’s Project Kuiper (Leo network) to compete with Starlink. The explosion is likely to delay Blue Origin’s launch schedule and raises questions about its involvement in NASA’s lunar program.

The sell-off hit several names hard: AST SpaceMobile ($ASTS) fell as much as 21% due to its launch contracts with Blue Origin. Other space stocks including Rocket Lab ($RKLB), Redwire ($RDW), Karman Holdings ($KRMN), Voyager Technologies ($VOYG), and Intuitive Machines ($LUNR) also declined significantly.

Analysts note that many space stocks trade on future potential rather than current profits. Setbacks like this often trigger sharp sell-offs as investors reassess timelines for revenue and launches. Deutsche Bank also downgraded AST SpaceMobile to Hold, citing potential delays to its 2026 targets.

Wall Street currently maintains a Hold consensus on $ASTS with an average price target of $86.13, implying downside risk.