New York, Feb 24, 2026, 04:59 EST — Premarket
- IBM tumbled 13.2% by the close on Monday, marking its sharpest single-day drop since October 18, 2000.
- Shares declined after Anthropic said its Claude Code tool could accelerate COBOL modernization.
- IBM’s upcoming remarks at a March 3 conference are in focus for investors, coming just ahead of the company’s April 22 earnings.
IBM shares took a beating Monday, plunging 13.2% to $223.35—their sharpest single-day fall since the late ’90s—after Anthropic claimed its AI tools could overhaul COBOL systems still running on Big Blue’s mainframes. That news also stung other software players. CrowdStrike and Datadog both lost ground as traders started questioning how disruptive the fresh wave of AI products could be across the sector. (Reuters)
The selloff got investors’ attention, zeroing in on a question that’s been hanging over the market for months: will “AI for code” mean big services names just cut costs, or could it actually open up a new round of products to push? IBM, for its part, keeps emphasizing its role as the go-to for major enterprises trying to keep essential systems up and running during upgrades.
COBOL — short for Common Business-Oriented Language — remains entrenched in banks, insurers, government agencies. Its persistence has long shored up IBM’s mainframe business, consistently generating modernization projects.
Anthropic says the economics are changing. According to the company, Claude Code now handles the initial analysis that once consumed the bulk of time on COBOL modernization—think dependency mapping and flagging migration risks. Teams, the company claims, can finish these projects “in quarters instead of years.” (Claude)
IBM fired back that day, calling the discussion a category mistake. “Translating code is one thing. Modernizing a platform is something else entirely,” said Rob Thomas, IBM’s senior vice president for software and chief commercial officer. He pointed to the true challenge: handling everything around the code—data, transactions, security, and operations. Syntax isn’t the main issue. (IBM Newsroom)
Even so, Monday’s action made clear the market doesn’t hesitate to hit anything endangering the modernization business model. The selloff served as a wake-up: the ranks of “AI winners” can shuffle in a flash, no matter how long a company has been in enterprise automation.
Evercore ISI’s Amit Daryanani pointed out that while easier migration could initially appear like a downside, customers have already had options for years. Many continue to stick with IBM’s platforms—reliability and regulatory needs play a role, he told Moneycontrol, which cited Bloomberg. (Moneycontrol)
The risk is clear enough: should clients start thinking AI tools handle more of the modernization work solo, IBM’s grip on services pricing could loosen, and fresh competitors might pick up some of that business. That scenario would hit just as firms are still squeezing IT budgets even as they pour money into AI.
The bull argument isn’t neat, but it’s there: if modernization tools accelerate, project numbers might jump, and regulated clients could stick with IBM systems, even if AI takes the sting out of switching. The key issue—who grabs the wallet share as these tools advance—remains.
This week, attention turns to IBM’s remarks at the Morgan Stanley Technology, Media and Telecom Conference on March 3. After that, the spotlight shifts to IBM’s preliminary first-quarter earnings, set for April 22, as investors scan for cues on demand and any forward-looking statements. (ibm.com)
