I was just talking about this recently on here I think. I actually had a chance to dispel this myth a bit with a family member who came to stay with me recently.

They are convinced that their news feeds and ads constantly come up with topics that would be too coincidental to explain any other way than their smart devices are constantly recording their verbal conversations. Conveniently enough, it happened several times during their visit!

As examples, the family member and I talked about how we like okra and they mentioned it had been a long time since they had good okra. Afterwards, stories and recipes for okra started showing up in their news feed. We also chatted for a bit about a specific actor that used to be in a bunch of movies, but that we don't really see them in much of anything anymore. Then they started getting ads for that actor's movies. This happened with a couple more things as well.

In the end, it was all completely explainable.

After the okra conversation, I looked up okra recipes because I intended to make some as part of meal for us since we both enjoy it and hadn't had it for awhile. Since we're both on the same wifi (and thus have the same IP address externally), those news items were almost certainly triggered by my recipe search.

For the famous actor, my family member had been watching some of his old movies on one of our streaming services that they don't have at home, so they were trying to catch up on things they'd like to see while they were visiting. It's not hard to imagine if you watch a couple Tom Hanks movies on Hulu (no that's not the actual actor or service), then you might start seeing ads for related movies that he may also have starred in, again, given that your smart devices are on the same wifi and have the same IP as mine.