v3.26.1
Derivative Financial Instruments
 6 Months Ended
Jul. 26, 2026
Derivative Instruments and Hedging Activities Disclosure [Abstract]  
Derivative Financial Instruments Derivative Financial Instruments
Foreign Currency Derivatives
We primarily utilize foreign currency forward contracts to mitigate the impact of foreign currency exchange rate movements on our operating expenses. These foreign currency forward contracts for operating expenses are designated as accounting hedges. Gains or losses on the contracts are recognized in Accumulated other comprehensive income or loss and reclassified to Operating expenses when the related operating expenses are recognized in earnings. During the first half of fiscal years 2027 and 2026, the impact of foreign currency forward contracts designated as accounting hedges on other comprehensive income or loss was not significant and all such instruments were determined to be highly effective.
We also entered into foreign currency forward contracts to mitigate the impact of foreign currency movements on monetary assets and liabilities. For our foreign currency contracts for assets and liabilities, the change in fair value of these non-designated contracts offsets the change in fair value of the hedged foreign currency-denominated monetary assets and liabilities, and is recognized in Other income, net. The fair values of our foreign currency contracts were not significant as of July 26, 2026, and January 25, 2026.
As of July 26, 2026, all foreign currency contracts mature within 18 months.
The gains and losses of our foreign currency contracts were not significant for the second quarter and first half of fiscal years 2027 and 2026.
Land, Power, and Shell Guarantees for AI Clouds
We entered into land, power, and shell guarantees for select AI cloud partners’ data center lease obligations in the event of their default. The guarantees are classified as credit derivatives, the fair values of which were not significant, with changes in fair values recognized in Other income, net.
Public Company Warrants
In the second quarter of fiscal year 2027, we received warrants to purchase shares of publicly-traded common stock with terms of three to five years. These warrants are classified as equity derivatives, initially recognized within Other assets, with the corresponding benefit substantially deferred. Subsequent valuation changes are recognized in Other income, net. As of July 26, 2026, the fair values of the equity derivatives, a Level 3 measurement, were $824 million
Derivative Financial Instrument Notional Values
The table below presents the notional values of our derivatives outstanding:
Jul 26, 2026Jan 25, 2026
(In millions)
Foreign currency contracts designated as accounting hedges$2,162 $1,765 
Not designated as accounting hedges:
Foreign currency contracts$2,252 $2,332 
Land, power, and shell guarantees for AI clouds (1)$3,529 $3,530 
Public company warrants$4,800 $— 
Equity forward contract$1,000 $— 
(1)    The maximum gross exposure under all agreements is reduced as the partners make payments to the lessors over terms ranging from five to seven years. The partners have placed $712 million in escrow to partially mitigate our potential exposure, which is not reflected in the notional value.