Common Stock and Stock-based Compensation

9 Months Ended

Sep. 26, 2026

Common Stock and Stock-based Compensation

Common Stock

Shares of common stock outstanding were as follows:


	Three Months Ended		Nine Months Ended
	September 26, 2026	September 27, 2025	September 26, 2026	September 27, 2025
	(In millions)
Balance, beginning of period	1,632	1,622	1,630	1,622
Common stock issued under employee equity plans	11	9	15	13
Common stock repurchases for tax withholding on equity awards	(3)	(3)	(4)	(3)
Repurchases of common stock	—	—	(1)	(12)
Common stock issued in the acquisition of ZT Systems	—	—	—	8
Balance, end of period	1,640	1,628	1,640	1,628

Treasury Stock

During the three and nine months ended September 26, 2026, the Company retired 3.5 million and 70.4 million of treasury shares, respectively, which returned to the status of authorized but unissued shares. The excess of purchase price over par value was allocated between additional paid-in capital and retained earnings.

Stock Repurchase Program

The Company has a stock repurchase program with total repurchase authority of $14 billion. During the nine months ended September 26, 2026, the Company repurchased 1.1 million shares of its common stock for $221 million, excluding the 1% excise tax on stock repurchases under the Inflation Reduction Act of 2022. As of September 26, 2026, $9.2 billion remained available for future stock repurchases. The program does not obligate the Company to acquire any common stock, has no termination date and may be suspended or discontinued at any time.

Warrants Issued to Customers

The Company issued warrants to two customers in October 2025 and February 2026, each entitling the holder the right to purchase up to 160 million shares of the Company’s common stock at an exercise price of $0.01 per share. The warrants vest in tranches as the customers reach specified purchase milestones and the Company’s stock price meets specified targets, including, for certain tranches, stock price performance relative to a market index. Each tranche becomes exercisable only after specified technical and commercial conditions are met by the customers. Each warrant expires five years from its issuance date, and is not settleable in cash. Upon exercise, the Company will issue shares of common stock.

Fair value is based on the estimated probability of the customers meeting the conditions for exercisability and on market-based assumptions. The weighted-average grant-date fair value of warrants outstanding was $14.25 per share. Grant-date fair values were estimated using a Monte Carlo simulation with the following assumptions:


Expected volatility						49% - 56%
Risk-free interest rate						3.56% - 3.69%
Expected dividends						—%
Expected terms (in years)						5

Expected volatility was based on historical and implied volatility of the Company's common stock, the risk-free interest rate was based on U.S. Treasury yields and the expected term was based on the contractual term of the warrants. For certain tranches, the Monte Carlo simulation also incorporated the historical correlation of the Company's stock price returns with a market index. As of September 26, 2026, the weighted-average fair value of the warrants was $178.58 per share, based on the Company’s updated probability of the customers meeting the conditions required for exercisability and primarily on its closing stock price as most market conditions had been met.

As of September 26, 2026, the Company had a warrant liability of $1.2 billion, representing the fair value of the warrants attributable to qualifying customer revenue recorded to date. During the three and nine months ended September 26, 2026, the Company recorded a noncash charge of $1.2 billion, primarily related to a loss from remeasurement of the warrant liability based on the change in fair value of the warrants within Other income (expense), net. The unrecognized grant-date fair value of the unvested warrants was $4.5 billion, representing the remaining value that would be recorded as a reduction of revenue proportionally as qualifying customer revenue is recognized. As of September 26, 2026, no warrant shares had vested or become exercisable, or been exercised, forfeited or expired. No warrant liability had been reclassified to Additional paid-in capital.

Stock-based Compensation

Stock-based compensation expense recorded in the Consolidated Statements of Operations was as follows:


	Three Months Ended				Nine Months Ended
	September 26, 2026		September 27, 2025		September 26, 2026		September 27, 2025
	(In millions)
Cost of sales	$	9	$	7	$	25	$	18
Research and development	418		333		1,197		905
Marketing, general and administrative	96		79		291		229
Total	$	523	$	419	$	1,513	$	1,152

In May 2026, the Company amended and restated its 2023 Equity Incentive Plan (the Plan), increasing the authorized shares for issuance under the Plan by 65 million to a total of 153 million shares of common stock. As of September 26, 2026, 104 million shares of common stock remained available for issuance under the Plan.

Treasury Stock