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Amazon (AMZN) Resumes Ad Spending on X Amid Musk’s Political Rise

Quiver Editor

Amazon (AMZN) is significantly increasing its ad spending on Elon Musk’s social media platform X, marking a major reversal from its earlier decision to pull back over concerns about hate speech. The shift, reportedly influenced by CEO Andy Jassy, signals a broader reassessment by major advertisers as political and business dynamics evolve. Apple (AAPL), which completely halted its ads on X in late 2023, is also considering a return, according to sources familiar with the matter. The move comes as Musk, a key ally of President Donald Trump, gains increased influence in Washington, overseeing a federal initiative to cut $2 trillion in government spending.

The return of major advertisers could provide a much-needed financial boost for X, which has struggled with declining ad revenue since Musk’s $44 billion acquisition in 2022. Investment banks holding X’s acquisition debt are attempting to offload it at a discount, and improved financials could ease that process. In a leaked email to employees, Musk acknowledged that the company was “barely breaking even,” though he later denied sending it. Ad buyers note that many returning brands are spending cautiously, remaining well below pre-Musk levels as they assess the platform’s evolving content policies.

Market Overview:
  • Amazon increases ad spending on X after a year-long retreat
  • Apple reportedly considering a return to advertising on the platform
  • Political and business realignments shape ad strategies for major brands
Key Points:
  • Musk’s influence in the Trump administration may be easing corporate concerns
  • X remains financially pressured despite efforts to diversify revenue
  • Advertisers are returning, but at lower spending levels than before
Looking Ahead:
  • Will more major brands follow Amazon and Apple back to X?
  • How will Musk’s regulatory battles impact the platform’s ad business?
  • Can X’s financials improve enough to offload its acquisition debt?
Bull Case:
  • Amazon’s decision to significantly increase ad spending on X signals growing confidence in the platform’s ability to address brand safety concerns, potentially encouraging other major advertisers like Apple to follow suit.
  • The return of major advertisers could provide a much-needed financial boost for X, helping to stabilize its ad revenue and improve its overall financial standing, particularly as investment banks seek to offload acquisition debt.
  • Musk’s influence in Washington and his alignment with President Trump’s administration may ease corporate concerns, fostering a more favorable regulatory environment for X and its advertisers.
  • X’s efforts to diversify revenue streams, including subscription services and content monetization, could complement the gradual recovery in ad revenue, creating a more sustainable business model.
  • The thawing relationship between Musk and Amazon founder Jeff Bezos could pave the way for deeper collaboration between the two companies, further strengthening X’s position in the digital advertising market.
Bear Case:
  • Despite Amazon’s increased ad spending, overall advertiser return remains cautious, with spending levels well below pre-Musk levels, highlighting lingering concerns about content policies and brand safety on X.
  • Ongoing lawsuits against ad agencies and brands accused of boycotting X create uncertainty for the platform’s ad business, potentially deterring other advertisers from fully committing to the platform.
  • X’s financial pressures, including its inability to fully offload acquisition debt, raise questions about its long-term viability and ability to compete with larger platforms like Google and Meta for ad dollars.
  • Musk’s free speech policies continue to pose risks for brand safety, as advertisers remain wary of associating their brands with controversial or harmful content on the platform.
  • Political and regulatory scrutiny tied to Musk’s influence in Washington could introduce new challenges for X, complicating its efforts to rebuild trust with advertisers and stabilize its business model.

Musk’s shifting role in the political landscape appears to be reshaping corporate sentiment toward X. Once a target of Trump’s criticisms, tech giants—including Amazon, Meta Platforms, and Apple—have warmed to the administration, with their CEOs contributing to Trump’s inauguration fund. Musk’s relationship with Amazon founder Jeff Bezos has also thawed, with the two billionaires spotted together at inaugural events.

While X’s ad revenue remains well below pre-acquisition levels, the potential return of major advertisers offers a path to stabilization. However, ongoing lawsuits, including Musk’s legal battle against ad agencies and brands accused of boycotting X, continue to add uncertainty. Whether the platform can regain its former ad dominance will depend on its ability to balance free speech policies with brand safety concerns in a rapidly shifting corporate and political landscape.

About the Author

David Love is an editor at Quiver Quantitative, with a focus on global markets and breaking news. Prior to joining Quiver, David was the CEO of Winter Haven Capital.

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