The cost of PC components, especially the more expensive parts like CPUs, has become a little too overinflated in the last couple of years. While the increased clock speeds, higher caches, and better memory support result in amazing gaming performance, not everyone wants to spend a fortune on the processor. As if that’s not enough, the problem is further exacerbated by the steep prices of DDR5 memory kits and the motherboards bearing the latest chipsets.

If you’re someone who watches CPU listings on eBay like a hawk, you may have come across old Xeon processors that barely cost a few hundred dollars. As you might expect, there’s a lot more to these cheap CPUs than what meets the eye. So, here are all the caveats to these multi-core behemoths that you need to be aware of before you go spending your hard-earned money on them.

Xeon CPUs and home lab systems are a match made in heaven

Their multi-core performance is quite stellar when running multiple containers

Starting with the pros first, even decade-old Xeon processors have no trouble pulling their own weight in almost every home lab task involving virtualization. Aside from a few processors that favor clock speeds over core count, the majority of Xeon processors feature significantly higher cores and threads than their consumer-grade counterparts.

Factor in their large cache and support for ECC memory, and it’s easy to see why an ancient $50 Xeon CPU can run a handful of virtual machines and containers without breaking a sweat. Besides a few outliers which I’ll get to in the next section, my dual Xeon E5-2650 v4 system exceeded my expectations in almost all tests I threw at it on Proxmox, TrueNAS, and Unraid.

And that’s a processor from 2016! If you get one of the newer Gold chips, you’ll see even better performance. While your exact mileage may vary depending on the model, most Xeon CPUs also make for killer video-editing workstations, especially for tasks that rely more on processors than GPUs.

Their single-core performance is downright terrible

You might want to look elsewhere if you're an esports enthusiast

While the multiple processing cores provide some solid boost to workstation tasks, these CPUs are nowhere near as powerful as their mainstream equivalents when it comes to gaming. Of course, there are certain factors like budget and your choice of games that skew things a bit. For example, if you can snag a decently powerful Xeon processor and motherboard combo for less than $150, it might even work as a makeshift gaming rig as long as you pair it with a decent graphics card and non-CPU bound titles.

However, for FPS, RTS, and other fast-paced games that rely more on single-core performance, most Xeon chips will struggle to get playable frame rates. Even if you outfit your enterprise-grade system with enough RAM to run thousands of browser tabs, your budget server processor will deliver lackluster performance in CPU-intensive games.

Remember how I said almost all virtualization tasks benefit from Xeon processes in the previous section? That’s because there are some notable cases where you may want the superior single-core performance of a consumer CPU. When I used my server PC to run some macOS apps on Promox, the performance was so atrocious that switching to my Ryzen 5 1600 delivered better results than using 32 virtual CPUs on the dual E5-2650 machine!

Older Xeon chips are power-starved beasts

Be prepared to pay absurdly high electricity bills if you run Xeon systems 24/7

Although Intel reduced the wattages on modern Xeon processors, most of the budget CPUs on eBay and other retailers belong to the pre-Skywell generation. Sadly, most of these processors chug power like there’s no tomorrow, and that’s just single-CPU systems! Once you factor in dual processor setups, the energy consumption enters the danger zone.

Of course, TDP isn’t the be-all-and-end-all metric for measuring the amount of energy your system will require during normal operations. But Xeon systems tend to pull an unreasonably high wattage even in their idle state. Heck, if you’re planning to keep the Xeon systems running all the time, their low costs will be offset by sky-high electricity over a long period. And that's before you include the cooling provisions needed to dissipate all the excess heat. Long story short, I’d recommend using cheap NUCs and mini-PCs if you intend to use the system for non-demanding tasks such as movie streaming, self-hosted VPN servers, and network-wide ad-blockers.

Cheap Xeon CPUs: To buy or not to buy?

Assuming you’ve done your research beforehand, older Xeon chips have a number of perks that make it a worthy investment. High-end server projects, including powerful web servers, home automation setups, and NAS systems, can benefit from the extra core count. Likewise, AI-training setups and Kubernetes clusters work incredibly well with Xeon CPUs.

If you’re familiar with the fine art of purchasing stuff from eBay, you can easily snag a top-notch Xeon CPU alongside a motherboard and plenty of ECC memory for well under five hundred dollars! They can technically work in budget gaming systems, but you'll have to your expectations low when running CPU-bound games. Finally, remember to turn off the Xeon-flavored system when it’s no longer in use, or you’ll risk incurring obscenely high electricity bills.