The AI-driven PC upgrade cycle ‘seems to be on hold,’ Jim Cramer says

CNBC's Jim Cramer on Monday said the artificial intelligence-driven PC upgrade cycle doesn't seem to have hit just yet.
He reviewed recent earnings and commentary from Best Buy, HP and Dell.
"The big AI-driven PC refresh cycle seems to be on hold, even though they're confident it'll play out," Cramer said of companies that sell the products. "It sounds more like a normal upgrade cycle than anything revolutionary, which I've found to be a tad disheartening."

CNBC's Jim Cramer on Monday said the artificial intelligence-driven PC upgrade cycle doesn't seem to have hit just yet, even as it's been about four years since the last refresh phase.

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"The big AI-driven PC refresh cycle seems to be on hold, even though they're confident it'll play out," Cramer said of companies that sell the products. "It sounds more like a normal upgrade cycle than anything revolutionary, which I've found to be a tad disheartening."

He reviewed recent earnings from Dell, HP and Best Buy, noting that all three saw shares decline after the reports failed to impress Wall Street. But he suggested that the three major consumer technology outfits are high-quality, so he's inclined to give them the benefit of the doubt.

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While Best Buy's results largely disappointed, Cramer noted that PC sales were more encouraging than the quarter itself. Management indicated on the earnings call that PC sales were driven by demand for newer models to replace old ones, not necessarily because of AI functions. While the company expressed excitement about the future of the new technology, one executive said AI is a "phased approach." While Cramer said he's glad Best Buy confirmed that there is a PC refresh cycle — even if it's not yet driven by AI — he said the stock is too expensive to recommend right now, adding that the threat of increased import tariffs looms.

Cramer noted that HP and Dell saw a discrepancy between their consumer and enterprise PC sales, with the latter coming in higher than the former. Cramer said he was pleased with Dell's transparency about its challenges, noting that management indicated a PC refresh cycle is approaching — especially with support for Windows 10 set to end next year. He added that Dell also has exposure to the "red-hot" AI server space.

"Putting it all together, it's clear that the PC upgrade cycle's going more slowly than any of these companies would like, but is it a lost cause?" Cramer said. "No way."