Just shy of one year ago, the Jeff Bezos space company Blue Origin dropped a bombshell.

To date, the rising space tourism star hasn't done much more than carry a couple dozen celebrities and high-net-worth individuals to the edge of space and back -- and has yet to put so much as a satellite in actual orbit. But working in cooperation with privately held Sierra Space, tiny space start-up Redwire (RDW 2.13%), and aerospace giant Boeing (BA -0.76%) as well, Blue Origin intends to form a new company called Orbital Reef -- and build a whole space station in orbit to help replace the aging International Space Station (ISS).  

Eleven months later, this project took a step forward when NASA confirmed last month that Orbital Reef passed a system definition review. The agency also authorized the companies to proceed with design work on the station -- and to keep collecting on NASA's $130 million Commercial Low Earth Orbit Destinations, or CLD, contract for this work.

How important is this to investors?

It's important to note: It is still very early innings on NASA's effort to use private companies to develop alternatives to the ISS before the latter goes out of service sometime toward the end of this decade. Passing the CLD review really just means that Orbital Reef, Sierra Space, Blue Origin, Redwire, and Boeing aren't having their project nixed at an early stage -- and will keep access to the funds they will need to build it.

It doesn't mean they will succeed in building a private space station. It just means they get to keep trying.

That being said, details are starting to firm up on how this project might progress. As SpaceNews reported late last month, the plan is for Orbital Reef to launch its first modules -- the building blocks from which Orbital Reef will be assembled -- in 2027. Assuming at least one of these modules is habitable, it's possible that in as little as five years from now, America could have two operational space stations in orbit around Earth: ISS and Orbital Reef

And there could be more.

Jump right in, the space pool is fine!

In additional to the Orbital Reef team, two other groups are working on similar contracts for NASA. Last year, Nanoracks and Lockheed Martin (LMT -0.27%) received $160 million to design a station concept called Starlab. Northrop Grumman (NOC 0.79%) won $125.6 million for a space station derived from its Habitation and Logistics Outpost module built for the Lunar Gateway. In theory at least, both of these stations should also begin launching by the end of this decade (if not by 2027).  

For that matter, predating all of the above, in January 2020, privately held Axiom Space won a $140 million contract from NASA to build, launch, and attach to ISS "at least one habitable commercial module" -- also by 2027.  

What it means to investors

As SpaceNews notes, multiple critics have emerged to suggest that building a new space station from the ground up in just five, or even eight years, may not be realistic. But here's the thing: By awarding contracts to not just one, not just two, but four separate teams of contractors, NASA has quadrupled its chances of at least one (if not more) of these teams succeeding in their audacious goal to build the world's first private space station in orbit. What's more, because three of these teams have publicly traded aerospace companies involved in their efforts, investors have three separate chances to profit from this effort.

Will Boeing -- former lead contractor in the construction of ISS itself -- lead Orbital Reef to success?

Perhaps. But I wouldn't rule out Lockheed Martin, either. With its expertise keeping astronauts alive in space, derived from its role building the Orion space capsule for NASA's Project Artemis, Lockheed gives the Starlab space station a similar chance of success. And don't forget Northrop Grumman. After all, it's already building a habitable space station of sorts, in the form of the HALO module for the Lunar Gateway station.

As America's best and brightest space companies vie to make commercial space stations a reality, trust that we'll keep an eye on their progress -- and keep you informed which of them are climbing fastest to orbit.