PC Supercycle: How to Invest in the AI Laptop Refresh

Savvy investors have learned to leverage the PC supercycle to maximize their returns. This long-awaited cycle occurs whenever there’s a major computer upgrade requiring users to make hardware purchases. In most cases, these hardware upgrades are necessary to utilize new technology. Here’s what you need to know.

Understanding PC Supercycles

PC supercycles can occur for several reasons. In some instances, the PC supercycle occurred due to a major technological upgrade. In other cases, companies like Microsoft (MSFT +0.7%) ushered in the change by dropping support for popular products or services. Here are some of the most influential PC supercycles to date:

Internet

The introduction of the internet caused users to upgrade their software and hardware to leverage its capabilities. Specifically, Windows 95 saw massive sales due to the product being bundled with a browser and modem. This demand boosted personal PC sales from 50 million units per year up to 130 million per year by the end of that decade.

Laptops

This PC supercycle was then followed by a shift to laptops, which boosted sales by 20%. These devices require integrated wireless connectivity, alongside lighter and less power-hungry hardware. This PC supercycle provided another boost to computer sales, which directly led to the next wave – tablet and touch devices.

Tablet / Smartphone

These devices were much smaller and lighter than traditional laptops. They offered more portability, utilizing more mobile-based technology than traditional laptop and computer designs. Today, touch-based computing still dominates the market via smart devices.

Windows 10 End-of-Support Triggers the Next PC Supercycle

The market has entered another PC supercycle this year, accelerated by the fact that Microsoft has officially stopped providing standard support for Windows 10. Windows 10 changed the game when it launched on July 29, 2015. Since that time, it has been pivotal in shaping the desktop market, where it helped to bridge old and new features in a seamless and easy-to-use environment.

Notably, a significant percentage of enterprise PCs still utilized this software as their primary operating system leading up to the deadline. With the official phase-out date of October 14, 2025 now behind us, Windows 10 users are effectively “on the clock”—they must either upgrade, pay for extended support, or risk being left unprotected from malware, ransomware, and other threats.

+1 Billion PCs Impacted

This maneuver forces the estimated 1 billion PCs that were still using Windows 10 late last year to make the upgrade or risk losing key features. Specifically, computers left on Windows 10 no longer gain access to free feature improvements, bug fixes, standard security updates, or certified Microsoft technical assistance.

The loss of these features will eventually result in buggy performance, delayed responses, and significantly increased risk. Also, Microsoft requires the upgrade as part of its larger strategy to integrate its Copilot AI systems and other security upgrades.

Why Microsoft Ended Windows 10 Support

Windows execs have stated that the upgrade will enable the company to expand its features and improve performance. Additionally, it will drive new hardware sales and Windows 11 licensing. This boost in revenue will help the company invest in its AI offerings.

Push New Products

In terms of new hardware and products, Microsoft’s decisions make perfect sense, especially when you realize that nearly 70% of enterprise PCs were still utilizing Windows 10 just prior to the deadline. These companies are now forced to make the switch if they intend to use key features like cloud services and cybersecurity protections.

AI Hardware

Another critical reason why Microsoft is eager to usher in a new cycle is to make room for AI systems. AI is seen as the next frontier for computing. As such, there’s a growing focus on how to integrate and build more effective models.

This decision will boost the adoption of AI-enabled PCs (AI PCs), Azure cloud services, and Microsoft 365 subscriptions. This shift helps to significantly boost the bottom line via recurring revenue. This newfound demand for new hardware and licensing will help to offset price losses due to tariffs and demand restrictions.

Maintenance Burden

Another reason why the company made the design was to lower its maintenance burden. Keeping up with Windows 10 vulnerabilities is a full-time job that has only gotten more complicated thanks to the introduction of AI-boosted hackers.

Sadly, Windows 10 found itself out of its element in this cyber warfare age. As such, Microsoft saves significant funding by stopping round-the-clock free protection for these legacy systems.

What to Expect from Your PC if You Don’t Upgrade Now

According to Microsoft, Windows 10 PCs will continue to operate normally following the end of support. However, as time progresses, security flaws and other performance issues will become evident. Consequently, significant vulnerabilities are sure to emerge.

Unpatched Vulnerabilities

Cybersecurity experts agree that there are heightened cybersecurity risks now that Microsoft has turned its back on Windows 10. Notably, the company stated that Windows Defender will still provide some protection against known risks. However, new vulnerabilities will not be patched, leaving you partially unprotected.

Consequently, cybersecurity experts predict that Windows 10 PCs are set to become the prime target for hackers seeking to exploit new vulnerabilities. This risk is a major issue, as Microsoft stated that Windows Defender is unable to mitigate OS-level gaps in functionality.

Performance Degradation

In terms of performance, legacy computers may begin to exhibit issues. The lack of support will inevitably lead to more buggy performance. Additionally, users may run into storage compatibility issues as vendors stop supporting Windows 10 or publishing software versions that work with this outdated OS.

This same issue will be a problem for hardware. Drivers will slowly become obsolete, and new peripherals won’t come with Windows 10 support, meaning that it will become harder to find accessories that work with your device.

Added Costs

Sadly, postponing the upgrade can result in additional costs for businesses and users. For example, enterprise clientele can expect to see elevated IT maintenance costs. These costs will emerge for several reasons, including additional downtime, lack of direct customer support, outdated or incompatible hardware, and more.

Lack of Insurance Coverage

Another key detail to consider is whether your business has certain requirements to stay compliant. For example, some laws govern financial exposure and how to store personal data. These regulations mandate that your systems be up to date. As such, the use of unsupported systems violates regulations and could lead to insurance companies denying cyber-liability claims.

Microsoft’s Extended Security Updates (ESU)

Microsoft is aware that there are over a billion people still using Windows 10. Recognizing this fact, they decided to provide limited support in the form of Microsoft’s Extended Security Updates (ESU) feature.

Companies that enroll in the ESU program will still receive critical security patches until October 2028 (up to 3 years post-deadline). This security patch feature will help to keep your devices protected, but it excludes any non-security updates and is a paid annual subscription. Microsoft recommends that users purchase ESU immediately if they intend to delay the upgrade.

Notably, ESU costs $61 per device for a 1-year subscription. Interestingly, the price doubles each year to encourage migration: businesses pay $122 for Year 2, and $244 for Year 3 (cumulative cost of $427 per device over 3 years). Consumers pay slightly less at $30 per device for a one-year extension.

New Income Stream

Unlike previous PC supercycles, Microsoft is set to capitalize on slow-moving clients. The ESU feature could generate potentially up to $7.3B in additional revenue over the coming 3 years, as businesses slowly migrate.

What the PC Supercycle Means for Investors

There are several predictions that can be made when discussing market movements in relation to the Windows 10 end of support. For one, it causes short-term friction and consumer pain.

Companies that have had their system operating for the last ten years without incident are going to feel stress making the upgrade. However, this friction acts as a catalyst. As time progresses, this maneuver will drive Microsoft’s stock upward.

It will enable the company to make further investments into its Azure AI systems and create new and more useful integration strategies. These benefits will come alongside a boost in ESU subscription fees.

Hardware Companies Benefit

Hardware prices will see higher sales thanks to the PC supercycle restarting. Interestingly, this growth has already begun directly following the deadline.

Firms like Nvidia (NVDA -0.47%), Lenovo, HP (HPQ -1.16%), Dell (DELL +0.73%), and other hardware and PC manufacturers are set to boom due to the sudden rush in demand. Notably, there has already been an 8.2% surge in global PC sales following the news.

Microsoft’s Market Dominance

The timing of this maneuver couldn’t be better for Microsoft. The company will use this upgrade to strengthen its market positioning and further drive its AI systems capabilities and accessibility.

Currently, Windows has an 80% market share. This latest upgrade should ensure that the company remains the dominant force in the OS sector. However, this PC supercycle is more competitive than the last.

Firms like Apple (AAPL -1.04%), Linux distributions, and Google (GOOGL -0.84%) have slowly been chipping away at Microsoft’s market dominance. This latest news could cause these companies a bit of stress as it will cause them to combat user migration due to hardware requirements and other crucial features.

Apple (macOS)

Analysts are split on how this news will affect Apple in the long run. Many believe that Microsoft’s forced migration could help boost MacOS as a viable alternative. Keenly, Apple products have a safer track record in terms of major hacks.

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Linux (Ubuntu)

On the other end of the spectrum are open source operating systems like Ubuntu. Linux is set to see some gains as users continue to voice issues with proprietary lock-ins and other software restrictions. Ideally, open source operating systems could help to fill in the gaps between Mac and Windows devices.

Google (ChromeOS)

Google is another company caught in the crossfire of the PC supercycle. On one hand, the Chrome browser will eventually drop support for Windows 10 devices, motivating users to switch. On the other hand, Google’s ChromeOS Flex may see increased adoption as a lightweight alternative that can extend the life of older hardware that cannot run Windows 11.

Which Companies Benefit Most From the PC Supercycle?

When you examine the PC supercycle as a whole, it’s easy to see that there are several firms set to see substantial gains from the demand for new hardware. These firms will enjoy increased demand for their higher-end products as new computer purchasers seek to upgrade to the top-of-the-line features and services. Here’s one company that could experience significant gains due to the PC Supercycle.

Dell Technologies

Dell (DELL +0.73%) launched as Turbo PC in 1984. The company’s founder, Michael Dell, was only 19 years old when he founded the company with only $1000.

By 1988, the company had expanded operations and rebranded to Dell Computer Corp before going public and securing $30M during its IPO. In the early 2000s, Dell Computer Corp rebranded again to Dell Technologies.

Today, Dell is leveraging the 2026 PC supercycle through a two-pronged strategy: the “Dell AI Factory” for enterprise and a refreshed Copilot+ PC portfolio for consumers. While competitor noise focuses heavily on generic “AI PCs,” Dell has strategically pivoted to prioritize hardware fundamentals—like display quality and battery life—while ensuring its devices meet the 40+ TOPS (Trillion Operations Per Second) threshold required for next-gen Windows features.

Key drivers for Dell in this cycle include:

• Commercial Refresh: Dell’s flagship Latitude and Precision lines are integrating Intel Core Ultra and Snapdragon X Elite chips to handle local AI inference, driving higher average selling prices (ASPs) in the B2B sector.
• Consumer Premium: The reinstated XPS 13, 14, and 16 models target the premium consumer segment, offering neural processing units (NPUs) capable of running local AI agents without sacrificing the build quality legacy users expect.
• AI Infrastructure: Beyond laptops, the “Dell AI Factory” initiative positions the company as an end-to-end partner for enterprises building their own AI clouds, creating a halo effect that supports its client PC business.

This mix of legacy brand strength and aggressive AI integration makes Dell a primary beneficiary of the hardware refresh cycle triggered by the Windows 10 sunset.

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PC Supercycle: How to Invest in the AI Laptop Refresh | Conclusion

Remember, understanding PC Supercycles can help you to determine when the industry will experience massive growth. As such, this information will help you to improve your investment strategy moving forward.

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