diff --git a/macos/Sources/Features/Terminal/TerminalView.swift b/macos/Sources/Features/Terminal/TerminalView.swift
index 51c4f6ddd..54cf9a02a 100644
--- a/macos/Sources/Features/Terminal/TerminalView.swift
+++ b/macos/Sources/Features/Terminal/TerminalView.swift
@@ -131,8 +131,8 @@ fileprivate struct UpdateOverlay: View {
                 HStack {
                     Spacer()
                     UpdatePill(model: appDelegate.updateViewModel)
-                        .padding(.bottom, 12)
-                        .padding(.trailing, 12)
+                        .padding(.bottom, 9)
+                        .padding(.trailing, 9)
                 }
             }
         }
diff --git a/macos/Sources/Features/Terminal/Window Styles/TerminalWindow.swift b/macos/Sources/Features/Terminal/Window Styles/TerminalWindow.swift
index 8ffdc3e35..661c89121 100644
--- a/macos/Sources/Features/Terminal/Window Styles/TerminalWindow.swift	
+++ b/macos/Sources/Features/Terminal/Window Styles/TerminalWindow.swift	
@@ -547,9 +547,10 @@ extension TerminalWindow {
         @ObservedObject var model: UpdateViewModel
         
         var body: some View {
+            // We use the same top/trailing padding so that it hugs the same.
             UpdatePill(model: model)
                 .padding(.top, viewModel.accessoryTopPadding)
-                .padding(.trailing, 10)
+                .padding(.trailing, viewModel.accessoryTopPadding)
         }
     }
 
diff --git a/macos/Sources/Features/Update/UpdatePill.swift b/macos/Sources/Features/Update/UpdatePill.swift
index 1dc29e250..b975e81c9 100644
--- a/macos/Sources/Features/Update/UpdatePill.swift
+++ b/macos/Sources/Features/Update/UpdatePill.swift
@@ -8,6 +8,9 @@ struct UpdatePill: View {
     /// Whether the update popover is currently visible
     @State private var showPopover = false
     
+    /// The font used for the pill text
+    private let textFont = NSFont.systemFont(ofSize: 11, weight: .medium)
+    
     var body: some View {
         if !model.state.isIdle {
             pillButton
@@ -43,8 +46,9 @@ struct UpdatePill: View {
                     .frame(width: 14, height: 14)
                 
                 Text(model.text)
-                    .font(.system(size: 11, weight: .medium))
+                    .font(Font(textFont))
                     .lineLimit(1)
+                    .frame(width: textWidth)
             }
             .padding(.horizontal, 8)
             .padding(.vertical, 4)
@@ -58,4 +62,11 @@ struct UpdatePill: View {
         .buttonStyle(.plain)
         .help(model.text)
     }
+    
+    /// Calculated width for the text to prevent resizing during progress updates
+    private var textWidth: CGFloat? {
+        let attributes: [NSAttributedString.Key: Any] = [.font: textFont]
+        let size = (model.maxWidthText as NSString).size(withAttributes: attributes)
+        return size.width
+    }
 }
diff --git a/macos/Sources/Features/Update/UpdateViewModel.swift b/macos/Sources/Features/Update/UpdateViewModel.swift
index 0678997d7..6341b3b42 100644
--- a/macos/Sources/Features/Update/UpdateViewModel.swift
+++ b/macos/Sources/Features/Update/UpdateViewModel.swift
@@ -37,6 +37,19 @@ class UpdateViewModel: ObservableObject {
         }
     }
     
+    /// The maximum width text for states that show progress.
+    /// Used to prevent the pill from resizing as percentages change.
+    var maxWidthText: String {
+        switch state {
+        case .downloading:
+            return "Downloading: 100%"
+        case .extracting:
+            return "Preparing: 100%"
+        default:
+            return text
+        }
+    }
+    
     /// The SF Symbol icon name for the current update state.
     /// Returns nil for idle, downloading, and extracting states.
     var iconName: String? {