AI Impact on Blue Giant, IBM's stock price plunges over 13% in a single day

IT Home, February 24 — IBM becomes the latest large tech company to see its stock plummet, with its share price falling sharply due to market concerns over new artificial intelligence features.

IT Home notes that on Monday, after AI company Anthropic published a new blog post, IBM’s stock dropped 13.2%. The article stated that its Claude Code can automate parts of the modernization process for the common business language (COBOL). COBOL is a high-level programming language developed specifically for business data processing needs. On that day, IBM was the worst-performing component in the S&P 500 index.

Since early February, IBM’s stock has declined by 26.8%, potentially marking the worst month since December 1992. According to Dow Jones Market Data, the stock also experienced its largest single-day decline since March 12, 2020.

COBOL supports many daily transactions in critical sectors such as banking, travel, insurance, and government. As described in Anthropic’s blog, this programming language, first introduced in 1960, handles 95% of ATM transactions in the U.S. For a long time, modernizing COBOL systems was complex and costly, which was IBM’s profitable “moat.” However, Anthropic’s latest announcement casts a shadow over IBM’s prospects in this area.

The AI company stated in its blog that Claude Code can “map dependencies across thousands of lines of code” and identify risks that would take human teams months to discover. “With AI, enterprise teams can modernize COBOL codebases in months rather than years,” Anthropic wrote.

Prior to this, IBM had been seen as a low-profile winner in AI, with its generative AI-related revenue exceeding $12.5 billion by the end of 2025. Recently, IBM’s valuation even surpassed Microsoft’s, reflecting market confidence in current AI winners and showing that investors prefer capital-light tech companies amid surging AI spending.

IBM’s dominance in COBOL is also a key pillar supporting its infrastructure and consulting business growth. Its mainframe Z systems, which provide core IT infrastructure for COBOL systems, grew 48% year-over-year in the fourth quarter, setting a 20-year revenue record.

Anthropic’s Monday announcement directly targets the traditional COBOL modernization consulting model. “AI automates work that would otherwise require many consultants, making economic models feasible and freeing engineers to focus on migration decisions that require specialized knowledge,” the company stated.

IBM is also developing its own AI tools to assist in COBOL system modernization. CEO Arvind Krishna said during last month’s earnings call that the company’s Watsonx AI platform can “refactor COBOL code into Java” and help technical staff understand existing code on COBOL platforms.