Income Taxes

12 Months Ended

Jan. 25, 2026

Income Tax Disclosure [Abstract]

Income Taxes

Income Taxes

The FASB issued a new accounting standard which includes new and updated income tax disclosures, including disaggregation of information in the rate reconciliation and income taxes paid, which we adopted on a prospective basis for the year ending January 25, 2026.

The Income tax expense applicable to income before income taxes consists of the following:

	Year Ended
	Jan 25, 2026		Jan 26, 2025		Jan 28, 2024
	(In millions)
Current income taxes:
Federal	$	19,039	$	14,032	$	5,710
State	1,218		892		335
Foreign	2,550		699		502
Total current	22,807		15,623		6,547
Deferred income taxes:
Federal	(1,364)		(4,515)		(2,499)
State	(885)		(242)		(206)
Foreign	825		280		216
Total deferred	(1,424)		(4,477)		(2,489)
Income tax expense	$	21,383	$	11,146	$	4,058

Income before income tax consists of the following:

	Year Ended
	Jan 25, 2026		Jan 26, 2025		Jan 28, 2024
	(In millions)
U.S.	$	123,181	$	77,456	$	29,495
Foreign	18,269		6,570		4,323
Income before income tax	$	141,450	$	84,026	$	33,818

The income tax expense (benefit) differs from the amount computed by applying the U.S. federal statutory rate of 21.0% to income before income taxes for the fiscal year ended January 25, 2026 as follows:

	Year Ended
	Jan 25, 2026
	(In millions, except percentages)
US Federal Statutory Tax Rate	$	29,704	21.0	%
State and Local Income Taxes, Net of Federal Income Tax Effect (1)	258		0.2	%
Foreign tax effects
Israel
Reduced statutory tax rate on qualifying income	(3,064)		(2.2)	%
Other	1,606		1.2	%
Other foreign jurisdictions	741		0.5	%
Effect of cross-border tax laws
Foreign-derived deduction eligible income	(4,208)		(3.0)	%
Other	(142)		(0.1)	%
Tax credits	(1,933)		(1.4)	%
Nontaxable or nondeductible items
Stock-based compensation	(1,475)		(1.0)	%
Other	29		—	%
Other (2)	(133)		(0.1)	%
Income tax expense	$	21,383	15.1	%

(1) State taxes in California, Tennessee, Arizona, and Illinois made up the majority of the tax effect in fiscal year 2026.

(2) Includes the tax effects of enactment of new tax laws, change in valuation allowance, and change in unrecognized tax benefits.

The income tax expense (benefit) differs from the amount computed by applying the U.S. federal statutory rate of 21% to income before income taxes for fiscal years ended January 26, 2025 and January 28, 2024 as follows:

	Year Ended
	Jan 26, 2025				Jan 28, 2024
	(In millions, except percentages)
Tax expense computed at federal statutory rate	$	17,645	21.0	%	$	7,102	21.0	%
Expense (benefit) resulting from:
State income taxes, net of federal tax effect	554		0.7	%	120		0.4	%
Foreign-derived deduction eligible income	(2,976)		(3.5)	%	(1,408)		(4.2)	%
Stock-based compensation	(2,097)		(2.5)	%	(741)		(2.2)	%
U.S. federal research and development tax credit	(990)		(1.2)	%	(431)		(1.3)	%
Foreign tax rate differential	(984)		(1.2)	%	(467)		(1.4)	%
Other	(6)		—	%	(117)		(0.3)	%
Income tax expense	$	11,146	13.3	%	$	4,058	12.0	%

In July 2025, the OBBBA was enacted into law and contains several changes to key U.S. federal income tax laws. We have recognized the tax effects of currently effective OBBBA provisions in our results for fiscal year 2026.

The amount of cash paid for income taxes (net of refunds) for the fiscal year ended January 25, 2026 is as follows:

	Year Ended
	Jan 25, 2026
	(In millions)
Federal	$	16,755
State
California	1,049
Other	1,041
Foreign
Israel	1,287
Other	156
Total income taxes paid, net of refunds	$	20,288

The tax effect of temporary differences that gives rise to significant portions of the deferred tax assets and liabilities are presented below:

	Jan 25, 2026		Jan 26, 2025
	(In millions)
Deferred tax assets:
Capitalized research and development expenditure	$	5,436	$	6,256
Net controlled foreign corporation tested income deferred tax assets	5,389		2,820
Accruals and reserves, not currently deductible for tax purposes	3,644		2,058
Research and other tax credit carryforwards	718		759
Operating lease liabilities	554		299
Net operating loss and capital loss carryforwards	443		456
Other deferred tax assets	679		566
Gross deferred tax assets	16,863		13,214
Less valuation allowance	(768)		(1,610)
Total deferred tax assets	16,095		11,604
Deferred tax liabilities:
Equity investments	(2,227)		(264)
Unremitted earnings of foreign subsidiaries	(1,813)		(891)
Operating lease assets	(533)		(286)
Acquired intangibles	(38)		(70)
Gross deferred tax liabilities	(4,611)		(1,511)
Net deferred tax asset (1)	$	11,484	$	10,093

(1)    Net deferred tax asset includes long-term deferred tax assets of $13.3 billion and $11.0 billion and long-term deferred tax liabilities of $1.8 billion and $886 million for fiscal years 2026 and 2025, respectively. Long-term deferred tax liabilities are included in other long-term liabilities on our Consolidated Balance Sheets.

As of January 25, 2026, we intend to indefinitely reinvest approximately $1.4 billion of cumulative undistributed earnings held by certain subsidiaries. We have not provided the amount of unrecognized deferred tax liabilities for temporary differences related to these investments as the determination of such amount is not practicable.

As of January 25, 2026 and January 26, 2025, we had a valuation allowance of $768 million and $1.6 billion, respectively, related to capital loss carryforwards, and certain other deferred tax assets that management determined are not likely to be realized due, in part, to jurisdictional projections of future taxable income, including capital gains. To the extent realization of the deferred tax assets becomes more-likely-than-not, we would recognize such deferred tax assets as income tax benefits during the period.

As of January 25, 2026, based on recent jurisdictional taxable income and expected future earnings, we concluded certain state deferred tax assets are more likely than not realizable and released $711 million of valuation allowance.

As of January 25, 2026, we had U.S. federal, state and foreign net operating loss carryforwards of $747 million, $427 million and $503 million, respectively. The federal and state carryforwards will begin to expire in fiscal year 2027. The foreign net operating loss carryforwards may be carried forward indefinitely. As of January 25, 2026, we had federal research tax credit carryforwards of $56 million, before the impact of uncertain tax positions, that will begin to expire in fiscal year 2027. We have state research tax credit carryforwards of $1.4 billion, before the impact of uncertain tax positions, of which $1.3 billion is attributable to the State of California and may be carried over indefinitely and $132 million is attributable to various other states and will begin to expire in fiscal year 2028. As of January 25, 2026, we had federal capital loss carryforwards of $902 million that will begin to expire in fiscal year 2028.

Our tax attributes remain subject to audit and may be adjusted for changes or modification in tax laws, other authoritative interpretations thereof, or other facts and circumstances. Utilization of tax attributes may also be subject to limitations due to ownership changes and other limitations provided by the Internal Revenue Code and similar state and foreign tax provisions. If any such limitations apply, the tax attributes may expire or be denied before utilization.

A reconciliation of gross unrecognized tax benefits is as follows:

	Jan 25, 2026		Jan 26, 2025		Jan 28, 2024
	(In millions)
Balance at beginning of period	$	2,861	$	1,670	$	1,238
Increases in tax positions for current year	1,959		1,268		616
Increases in tax positions for prior years	57		48		87
Lapse in statute of limitations	(224)		(27)		(19)
Decreases in tax positions for prior years	(157)		(88)		(148)
Settlements	(76)		(10)		(104)
Balance at end of period	$	4,420	$	2,861	$	1,670

Included in the balance of unrecognized tax benefits as of January 25, 2026 are $3.7 billion of tax benefits that would affect our effective tax rate if recognized.

We classify an unrecognized tax benefit as a current liability, or amount refundable, to the extent that we anticipate payment or receipt of cash for income taxes within one year. The amount is classified as a long-term liability, or long-term amount refundable, if we anticipate payment or receipt of cash for income taxes during a period beyond a year.

We include interest and penalties related to unrecognized tax benefits as a component of income tax expense. We recognized net interest and penalties related to unrecognized tax benefits in the income tax expense line of our consolidated statements of income of $103 million, $92 million, and $42 million during fiscal years 2026, 2025, and 2024, respectively. As of January 25, 2026 and January 26, 2025, we have accrued $374 million and $251 million, respectively, for the payment of interest and penalties related to unrecognized tax benefits, which is not included as a component of our gross unrecognized tax benefits.

We are subject to examination by taxing authorities both in the United States and other countries. As of January 25, 2026, the significant tax jurisdictions that may be subject to examination include the United States for fiscal years after 2022, as well as Canada, China, Germany, Hong Kong, India, Israel, Italy, and Taiwan for fiscal years 2014 through 2025. As of January 25, 2026, the significant tax jurisdictions for which we are currently under examination include the United States, Germany, Hong Kong, India, Israel, and Taiwan for fiscal years 2014 through 2025.