A woman walks past a polling station during early voting for the US midterm elections on October 28, 2022 in Silver Spring, Maryland.
Brendan Smialowski | AFP | Getty Images
In the 2020 election cycle, the Democratic Governors Association spent roughly 75% of its advertising budget on Facebook, taking advantage of the app’s ubiquity and its ability to deliver hyper-targeted ads to potential voters.
For the 2022 midterm elections, which include many key gubernatorial contests and will determine control of the House and Senate, the group has steered much of its money elsewhere. Ahead of Election Day on Nov. 8, just half of its spending is taking place on Facebook.
“I think the throughline that you’ll see overall is Facebook has become a much less effective platform over the past two years,” said Laura Carlson, digital director of the Democratic Governors Association.
Facebook has been mired in political controversy for over a half decade, since the platform was abused during the 2016 election campaign by foreign actors spreading disinformation. The 2020 season wasn’t much better, and ultimately led to Facebook’s banning of ex-President Donald Trump from the app following the Jan. 6, 2021, insurrection on the U.S. Capitol.
But none of that explains why political campaigns have been turning away from Facebook. Rather, Carlson said the changes that Apple made to iOS last year, which limited the targeting capabilities for advertisers, have made Facebook a less valuable tool for disseminating political messages to the correct audience.
“I think the real culprit that you see is the privacy changes on the iPhone,” Carlson said. She said her organization is pushing the other half of its $10 million budget to areas like traditional email and text campaigns as well as newer platforms like connected TV and streaming services.
The retreat from Facebook by political advertisers mirrors the broader challenge the company faces now that brands can no longer rely on key pieces of user data to promote their products and services. Facebook parent Meta just reported its second straight quarter of declining revenue and said another decline is coming in the fourth quarter. The stock has lost 72% of its value year to date and closed on Monday at its lowest point since early 2016.
Political ads have always been a small part of Facebook’s overall business. An analysis by CNBC ahead of the 2020 election, based on data from Facebook’s ad library and the Center for Responsive Politics, showed that at least 3% of the company’s estimated revenue for the third quarter of that year was from politicians and campaigns.
Protestors demonstrate with an art installation of body bags during a protest against Facebook and what they claim is disinformation regarding coronavirus disease (COVID-19) on the social media giant’s platform, outside the front doors of Facebook headquarters in Washington, U.S., July 28, 2021.
Jim Bourg | Reuters
For many campaigns, Facebook had become the go-to spot for ads because of the reach and the ability to both distribute messages and raise money from wide swaths of people. Representative Alexandria Ocasio-Cortez, D-N.Y., berated fellow Democratic nominees after the 2020 election, telling The New York Times that the party lost seats in Congress because candidates didn’t spend enough on Facebook.
The math has since changed.
Annie Levene, a partner for the democratic advertising firm Rising Tide Interactive, said her organization has slashed its Facebook budget for the midterms compared to the last cycle from around 10% to between 3% and 5%.
Levene said Facebook is still useful for running relatively simple fundraising ads where it’s easy to track return on investment. But for the more complicated persuasion ads, Levene said Facebook doesn’t offer a lot of value since the iOS change.
“We have to do what is best for our clients,” Levene said. She said she’ll use Facebook for raising money, because “it would be sort of malpractice to say here’s a channel that we could be really successful for you on fundraising, but we’re not going to do it.”
Ethan Eilon, the president of digital marketing firm IMGE, which works with Republicans, said the Apple iOS update is a major reason his group is “investing considerably less in Facebook advertising compared to other platforms and channels than we were last cycle.”
However, it’s not just about Apple. Advertisers told CNBC that they also learned an important lesson from a turbulent 2020 cycle, when platforms including Facebook banned new political ads from running the week before the election. Facebook said its ban, announced about two months before Election Day, was intended to “connect people with authoritative information” and to “fight misinformation.”
‘A big shake-up’
Grace Briscoe, senior vice president at marketing technology firm Basis Technologies, said the short notice was particularly concerning in tight races like the Georgia Senate runoff elections in January 2021.
“That was a big shake-up, I think, in a lot of our clients’ minds of being overly reliant on a platform that might sort of pull the rug out from under you,” Briscoe said. “That’s not helping with that sort of trust level between the political advertisers for sure and the platforms.”
Basis, whose technology is used by political campaigns, saw a 1,500% increase in spending on connected TV devices in the first half of 2022 compared to the first half of 2020, Briscoe said. That’s especially significant considering there’s no presidential contest this cycle, which typically means lower turnout.
Two years ago, streaming platforms made up a small share of overall political ad spending, though many experts predicted it would grow over time. The pandemic accelerated that trend since so many consumers turned to streaming platforms while stuck at home, and content for cord-cutters proliferated.
Total ad spending on connected TV platforms climbed 57% in 2021 to $15.2 billion and is expected to jump another 39% this year to $21.2 billion, according to the Interactive Advertising Bureau. Ad tracking firm AdImpact projected that of the $9.7 billion spent on political ads this cycle, $1.4 billion would go to connected TVs.
John Padua, vice president of media buying at Trilogy Interactive, said some of his agency’s spending that had been on Facebook has been redirected toward streaming.
That last week of ads before an election is so important, Padua said, because you’re “trying to find those last five, 10 thousand votes that could make the biggest difference in a congressional election, particularly in a potential wave year.”
He added that you get a last chance to respond to a “bit of polling that tells us that we need to shore up a certain demographic or people who have certain issues.”
Padua, whose agency has worked for the Democratic Congressional Campaign Committee, Senate Majority Leader Chuck Schumer, D-N.Y., and Sen. Raphael Warnock, D-Ga, said Trilogy is still going to do last-minute ads, but “we’re going to just put that message out on different platforms, and Facebook is just going to be cut out of buying.”
Facebook parent company Meta declined to comment for this story.
Advertisers stressed that spending on Facebook and other social platforms is still valuable and an important part of the overall mix. Political groups and lawmakers spent around $84 million on Facebook ads during the third quarter of 2022, with around $58 million spent on direct response advertising, according to Ad Impact.
But every source who spoke on the topic to CNBC said Facebook is not as effective as in past cycles, leading many to search out other options like streaming.
Smart TVs provide a medium that’s already quite familiar to political advertisers: television. Advertisers said that TV ads tend to be more about persuasion and telling a story than ads on Facebook.
Interest in connected TV and over-the-top platforms has “skyrocketed” since the 2020 presidential elections, said Joe Marino, the head of client success at Madhive, which helps companies run and manage ad campaigns across streaming services. “Going into this cycle now, streaming is literally a part of every single buy, and it’s a big part of it,” Marino said.
He added that the platforms have matured dramatically and have made it much simpler to run campaigns than in the past, approaching Facebook-like ease.
“The beauty in digital is that budgets can be fluid,” Marino said, contrasting streaming with traditional linear television. “You can cancel them on a dime and move them on a dime.”
Briscoe said the targeting has gotten much better as well. Streaming services now have the type of location and behavioral click-through data that advertisers highly value in efficiently getting their message out.
“It is actually much easier for campaigns to scale connected TV, even down to like a state legislative district, which was not possible two years ago even,” Briscoe said. “Two years ago, we were excited if a connected-TV campaign could scale in a congressional district. Now, you’re getting much more narrow.”
Roku CEO Anthony Wood said after his company’s second-quarter earnings report in July that “political is a good vertical for us, a scenario that’s growing” even though was “not a huge business” at the time. Roku and Amazon lead the U.S. market for streaming devices.
‘Completely performative’
Just as new ad avenues are popping up, a persisting issue for Facebook, advertisers say, is that the restrictions the company put on political campaigns in 2020 haven’t been effective at slowing the spread of misinformation.
Hate speech and conspiracy theories have continued to run rampant on Facebook, despite community guidelines that ban such behavior. But much of that content comes from people who post it for free, rather than paid placements.
“I don’t think the problem on these platforms, whether it’s Facebook or Google, was ever advertising,” said Patrick McHugh, a partner at Gambit Strategies, which focuses on online mobilization for Democratic causes and candidates. He called Facebook’s policies “completely performative.”
“They’ve utilized political advertising as sort of the facade that they then use to put restrictions on because they like to claim that fixes the problem,” McHugh added. “The truth is, if they really did fix the actual problem, that is rooted in their algorithm that will cost them money.”
It doesn’t help that Facebook has turned into a punching bag on Capitol Hill by many of the same politicians who relied on the site for prior campaigning.
Facebook co-founder, Chairman and CEO Mark Zuckerberg testifies before the House Energy and Commerce Committee in the Rayburn House Office Building on Capitol Hill April 11, 2018 in Washington, DC.
Yasin Ozturk | Anadolu Agency | Getty Images
Facebook executives have been called to Washington numerous times in recent years to testify about the legal liability that protects social media, antitrust issues facing Big Tech and, most recently, the whistleblower revelations last year about the company’s unwillingness to make changes despite knowing some of the content it hosts is harming users.
Marino said that during past crises advertisers have shifted budgets away from Facebook, only to come back when the temperature cooled. That occurred after the Cambridge Analytica scandal of 2018, which was explosive at the time and eventually led the company to settle a lawsuit. Facebook’s business momentum quickly recovered, however.
“If you see any press about Facebook that’s negative, generally budgets flow out of that really quickly into other channels,” Marino said. “They’ll flow back once people pretend to forget.”
This cycle has a distinctly different tone, though. So many changes have taken place with Facebook’s business and the broad ad ecosystem that advertisers are suggesting the latest shift away to other platforms seems more permanent.
Republican political consultant Luke Thompson said that while Facebook is still “essential for fundraising and volunteer organizing,” it no longer has the tools necessary to attract broader campaigns.
Apple’s crackdown has indeed diminished Facebook’s position in political advertising. But Thompson said it started with the “reputational damage from the Cambridge Analytica scandal,” which he described as a cynical effort by lawmakers to try and convince the public of election interference.
“Since then, the platform has become much less open, more rigid, and less willing to share outcome data,” Thompson said.
Against a volatile market backdrop, the software maker’s stock has gained 45% and is the best performer among companies valued at $5 billion or more, according to FactSet. The closest tech names are VeriSign, up 33%, Okta, up 30%, Robinhood, up 29%, and Uber, up 29%.
“When you think about macroeconomic concerns, you as a company need to be more efficient, and this is where Palantir thrives,” said Bank of America analyst Mariana Pérez Mora.
Palantir has set itself apart in the software world for its artificial-intelligence-enabled tools, gaining recognition for its defense and software contracts with key U.S. government agencies, including the military. In the fourth quarter, its government revenues jumped 45% year-over-year to $343 million.
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Companies have faced immense volatility in 2025 as tariffs threaten to jeopardize global supply chains and halt day-to-day manufacturing operations by hiking costs. Those fears have brought the broad market index down about 7% this year, while the tech-heavy Nasdaq Composite has slumped 11%.
At the same time, the Trump administration has clamped down on government spending, giving Tesla CEO Elon Musk‘s Department of Government Efficiency freedom to slash public sector costs. Some administration officials have touted shifting dollars from consulting contracts to commercial software providers like Palantir, said William Blair analyst Louie DiPalma.
“Palantir’s business model is highly aligned with the priorities of the Trump administration in terms of increasing agility and being very quick to market,” he said.
That’s put Palantir in the league with major contractors such as Lockheed Martin and Northrop Grumman, which have outperformed in this year’s downdraft. Many companies in the space are also looking to partner with the firm and tend to flock to defense during recessionary times, DiPalma said.
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Palantir vs. the Nasdaq Composite
CEO Alex Karp has also been a vocal supporter of American innovation and the company’s central role in helping prop up what he called the “single best tech scene in the world” during an interview with CNBC earlier this year. Karp also told CNBC that the U.S. needs an “all-country effort” to compete against emerging adversaries.
But the ride for Palantir has been far from smooth, and shares have been susceptible to volatile swings. Shares sold off nearly 14% during the week that Trump first announced tariffs. Shares rocketed 22% one day in February on strong earnings.
Its inclusion in more passive and quant funds over the years and the growing attention of retail traders has added to that turbulence, DiPalma said. Last year, the company joined both the S&P and Nasdaq. Palantir trades at one of the highest price-to-earnings multiples in software and last traded at 185 times earnings over the next twelve months. That puts a steep bar on the stock.
Kurt Sievers, chief executive officer of NXP Semiconductors NV, during the Federation of German Industries (BDI) conference in Berlin, Germany, on Monday, June 19, 2023.
NXP Semiconductor Inc. fell about 8% on Monday after the chip company announced that CEO Kurt Sievers will step down as part of its latest earnings.
Here’s how the company did, versus LSEG consensus estimates:
Earnings per share: $2.64 adjusted vs. $2.58 expected
Revenue: $2.84 billion vs. $2.83 billion expected
Sievers will retire at the end of the year, with Rafael Sotomayor stepping in as president on April 28, 2025.
The company beat expectations on the top and bottom lines but cited a “challenging set of market conditions” looking forward.
“We are operating in a very uncertain environment influenced by tariffs with volatile direct and indirect effects,” Sievers said in an earnings release.
Sales in NXP’s first quarter declined 9% year over year.
The company posted $1.67 billion in auto sales during the first quarter, trailing analyst estimates of $1.69 billion.
Read more CNBC tech news
NXP Semi said that second-quarter sales would come in at a midpoint of $2.9 billion, ahead of the $2.87 billion that analysts were projecting. Second-quarter adjusted EPS will be $2.66, in line with analyst estimates.
The company logged first-quarter net income of $490 million, which was a 23% year-to-year drop from $639 million.
NXP’s net income per share was $1.92 compared to $2.47 during the same time a year ago. A drop of 22%.
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Microsoft President Brad Smith speaks during signing ceremony of cooperation agreement between the Polish Ministry of Defence and Microsoft, in Warsaw, Poland, February 17, 2025.
Kacper Pempel | Reuters
The U.S. cannot afford to fall behind China in the race to a working quantum computer, Microsoft President Brad Smith wrote Monday.
President Donald Trump and the U.S. government need to prioritize funding for quantum research, or China could surpass the U.S., endangering economic competitiveness and security, Smith wrote.
“While most believe that the United States still holds the lead position, we cannot afford to rule out the possibility of a strategic surprise or that China may already be at parity with the United States,” Smith wrote. “Simply put, the United States cannot afford to fall behind, or worse, lose the race entirely.”
Microsoft’s position is the latest sign that research into quantum computing is starting to heat up among big tech companies and investors who are looking for the next technology that could rival the artificial intelligence boom.
Smith is calling for the Trump administration to increase funding for quantum research, renew the National Quantum Initiative Act and expand a program for testing quantum computers by the Defense Advanced Research Projects Agency, or DARPA. The Microsoft executive is also calling on the White House to expand the educational pipeline of people who have the math and science skills to work on quantum machines, fast-track immigration for Ph.D.s with quantum skills and for the government to buy more quantum-related computer parts to build a U.S. supply chain.
Microsoft did not detail how China surpassing the U.S. in quantum computing technology would endanger national security, but a National Security Agency official last year discussed what could happen if China or another adversary surprised the U.S. by building a quantum computer first.
The official, NSA Director of Research Gil Herrera, said that if such a “black swan” event happened, banks might not be able to keep transactions private because a quantum computer could crack their encryption, according to the Washington Times. A working quantum computer could also crack existing encrypted data that is usually shared publicly in a scrambled fashion, which could reveal secrets on U.S. nuclear weapon systems.
In February, Microsoft announced its latest quantum chip called Majorana, claiming that it invented a new kind of matter to develop the prototype device. Last year, Google announced Willow, a new device the company claimed was a “milestone” because it was able to correct errors and solve a math problem in five minutes that would have taken longer than the age of the universe on a traditional computer.
While the computers people are used to use bits that are either 0 or 1 to do calculations, quantum computers use “qubits,” which end up being on or off based on probability. Experts say that quantum computers will eventually be useful for problems with nearly infinite possibilities, such as simulating chemistry, or routing deliveries.
But the current quantum computers are far away from that point, and many computer industry participants say it could take decades for quantum computers to reach their potential.
Microsoft’s chip, Majorana, has eight qubits, but the company says it has a goal of least 1 million qubits for a commercially useful chip. Microsoft needs to build a device with a few hundred qubits before the company starts looking at whether it’s reliable enough for customers.