The claim that it is now illegal to boycott Israel in 38 U.S. States is true because multiple reliable sources confirm that 38 states have enacted laws or executive orders restricting or penalizing boycotts of Israel, particularly targeting the BDS movement.
It is now illegal to boycott Israel in 38 US STATES

Map Shows States Where Boycotting Israel is Illegal - Newsweek
Source: newsweek.com
Key Evidence
Newsweek reports identify 38 states with anti-boycott laws targeting companies that boycott Israel.
newsweek.comnewsweek.comMap Shows States Where Boycotting Israel is Illegal
newsweek.comnewsweek.comCompanies Boycotting Israel Can’t Do Business With These U.S. States
The ACLU confirms over two dozen states have adopted such restrictive policies recently.
aclu.orgaclu.orgCongress, Laws Suppressing Boycotts of Israel Are Unconstitutional. Sincerely,...
Human Rights Watch documents at least 27 states with these laws as of 2019, indicating growth to the current number.
hrw.orghrw.orgUS: States Use Anti-Boycott Laws to Punish Responsible Businesses
What the Evidence Shows
Multiple sources from recent years indicate that a significant number of U.S. States have passed legislation or executive orders that restrict or penalize boycotts of Israel. These laws generally prohibit state agencies from contracting with companies that participate in boycotts against Israel, especially those aligned with the Boycott, Divestment, and Sanctions (BDS) movement. Newsweek articles (,newsweek.comnewsweek.comMap Shows States Where Boycotting Israel is Illegal
newsweek.comnewsweek.comCompanies Boycotting Israel Can’t Do Business With These U.S. States) and a Reddit community summary
reddit.comreddit.comr/IsraelPalestine on Reddit: What justifications do you have for criminalizing... specifically cite the figure of 38 states having such laws or policies as of the mid-2020s.
The American Civil Liberties Unionaclu.orgaclu.orgCongress, Laws Suppressing Boycotts of Israel Are Unconstitutional. Sincerely,... notes that more than two dozen states have adopted these laws in recent years, and Human Rights Watch
hrw.orghrw.orgUS: States Use Anti-Boycott Laws to Punish Responsible Businesses documents at least 27 states with anti-boycott laws as of 2019, showing a trend of increasing adoption. These laws do not criminalize individual personal boycotts per se but impose penalties or restrictions on businesses and government contractors who engage in or support boycotts of Israel.
There is some legal controversy and constitutional challenges regarding free speech implications, but the existence of these laws in 38 states is well documented.