IBM drops over 13% amid AI surge, marking the biggest decline in 25 years

On February 23rd, local time, the three major U.S. stock indices all closed down more than 1%. The Dow fell 1.66%, the Nasdaq dropped 1.13%, and the S&P 500 declined 1.04%. Most large technology stocks declined, with Microsoft and Netflix dropping over 3%, Tesla, Amazon, and Meta falling more than 2%, and Google and Intel dropping over 1%. Apple and Nvidia saw slight gains.

Among them, IBM’s stock closed at $223.35, down 13.15%, marking the largest decline since 2000. With this drop, IBM’s stock price has fallen a total of 27% in February so far, possibly the largest single-month decline since at least 1968.

In terms of news, artificial intelligence company Anthropic announced the launch of new programming features for its Claude Code product, automating most research and analysis work for the COBOL programming language, which has raised market concerns about IBM’s mainframe business prospects.

COBOL, short for Common Business-Oriented Language, is a programming language developed in the late 1950s that has dominated the business data processing field. It is widely used in payment processing and retail transaction systems, which are core areas for IBM.

In a blog post, Anthropic explained that about 95% of ATM transactions in the U.S. use COBOL, making it a key area for AI-driven disruption at lower costs. “Billions of lines of COBOL code run in production environments daily, supporting critical systems in finance, aviation, and government sectors. Despite this, the number of people who truly understand this language is decreasing year by year.”

Anthropic stated that, in the past, modernizing COBOL systems required many consultants spending years creating workflow diagrams. Tools like Claude Code can automate the most labor-intensive phases of exploration and analysis during COBOL modernization.

Most large mainframes running COBOL are manufactured by IBM, and a significant portion of IBM’s revenue still comes from mainframes and related maintenance ecosystems.

At the end of last month, IBM released its Q4 2025 financial report, showing quarterly revenue of $19.69 billion, up 12% year-over-year. Software revenue was $9.03 billion, up 14%, consulting revenue was $5.35 billion, up 3.4%; operating earnings per share were $4.52; free cash flow for the quarter was $7.55 billion, up 23%.

The core driver of IBM’s quarterly performance was its software division, which accounted for 45.8% of total revenue. Its high gross margin (85.0%) significantly enhanced the company’s overall profitability. Additionally, due to the continued strong sales of IBM’s latest mainframes released last year, the infrastructure division’s revenue reached $5.13 billion, exceeding expectations.