A conservative group that has spent millions backing Nikki Haley's presidential campaign says it isn't giving up on her — but acknowledges she faces an "uphill" battle and that it's focusing on Senate races.

Why it matters: AFP Action, a super PAC that has pushed for a Republican alternative to GOP presidential front-runner Donald Trump, has said it would "redouble" its efforts to back Senate candidates if it appeared Trump would be the Republican nominee.

• The group — part of the Americans for Prosperity network founded by billionaire Charles Koch and his late brother, David — fears a Trump nomination would be a massive drag on other Republicans on the November ballot.

Zoom in: AFP Action gave Haley's campaign a huge boost last month when it deemed her the Republican with the best shot at beating Trump in the presidential primary.

• It announced plans to spend $27 million on ads and on-the-ground campaigning in Iowa, New Hampshire and five other states.
• But Haley finished third in Iowa's caucuses and lost New Hampshire to Trump by double digits, giving Trump a virtual lock on the GOP nomination.

AFP Action is still on the ground supporting Haley in her home state of South Carolina in the run-up to its Feb. 24 primary. But the group's leaders are clear-eyed about the challenges she faces, particularly with a GOP base that overwhelmingly favors Trump.

• "This is still an uphill battle," AFP Action senior adviser Emily Seidel wrote after Tuesday's New Hampshire primary results. "Now all eyes turn to South Carolina, where she has a steeper road ahead."
• Haley has vowed to stay in the race through South Carolina, where polls suggest Trump is up by about 30 points.

While continuing to back Haley, AFP Action has begun preparing for a Trump nomination.

• "If Trump is ultimately the nominee ... the threat of a Democrat sweep increases dramatically, making the Senate and House strategies that much more important," Bill Riggs spokesperson for AFP Action, told Axios.

Between the lines: AFP Action has endorsed three candidates in competitive Senate races. They have the blessing of Rep Steve Daines (R-Mont.), the chair of the National Republican Senatorial Committee who has vowed to weed out fringe GOP candidates. Those candidates are:

• Sam Brown, an Afghanistan war veteran who's seeking the Nevada Senate seat now held by Democrat Jacky Rosen.
• Dave McCormick, a former hedge fund CEO who lost to Trump-backed celebrity doctor Mehmet Oz in Pennsylvania's GOP primary in 2022. Oz went on to lose to Sen. John Fetterman (D). This year McCormick has an easier path to be the GOP nominee who will try to unseat Sen. Bob Casey (D-Penn.).
• Tim Sheehy, a businessman who's seeking Democratic Sen. John Tester's seat in Montana.

The group already is door knocking, recruiting volunteers and spending on mail and digital ads for those Senate contenders — and it's preparing to endorse GOP candidates in Wisconsin, Michigan and Ohio.

• In Nevada and Montana, AFP Action says it's reached out about 60,000 voters and made door hangers to introduce Brown and Sheehy.
• It's also endorsed 15 House candidates and says it's prepared to get involved in as many as 100 races.

The big picture: Democrats hold a razor-thin majority in the Senate and are defending two-thirds of the 33 Senate seats up for election in November. That includes seats in Montana, Ohio and West Virginia — states that Trump won handily in 2020.

• A Republican gain of just one seat would hand the GOP a majority in the Senate. Democrats are widely seen as having a good chance to win control of the House from Republicans.