Systems and methods are described for providing performance-based hardware emulation in an on-demand network code execution system. A user may generate a task on the system by submitting code. The system may determine, based on the code or its execution, that the code executes more efficiently if certain functionality is available, such as an extension to a processor's instruction set. The system may further determine that it can provide the needed functionality using various computing resources, which may include physical hardware, emulated hardware (e.g., a virtual machine), or combinations thereof. The system may then determine and provide a set of computing resources to use when executing the user-submitted code, which may be based on factors such as availability, cost, estimated performance, desired performance, or other criteria. The system may also migrate code from one set of computing resources to another, and may analyze demand and project future computing resource needs.