IBM Shares Drop 11% as AI Technology Disrupts COBOL Modernization
Written by Emily J. Thompson, Senior Investment Analyst
Updated: Feb 23 2026
0mins
Should l Buy IBM?
Source: Newsfilter
- Significant Stock Decline: IBM shares plummeted 11% in Monday afternoon trading, reflecting the company's vulnerability in the face of rapidly evolving AI technology, particularly after Anthropic unveiled COBOL capabilities for its Claude product, undermining market confidence in IBM.
- COBOL Modernization Challenges: Anthropic's Claude Code product can automate much of the exploration and analysis work involved in COBOL modernization, posing new competitive pressures on IBM, as COBOL remains a core programming language for its business operations.
- Market Impact: COBOL currently handles 95% of ATM transactions in the U.S., and Anthropic highlighted that despite its critical role in finance, airlines, and government systems, the number of people who understand COBOL is dwindling each year, presenting IBM with significant market challenges.
- AI Technology Disrupts Tradition: Anthropic noted that legacy code modernization has stalled due to high understanding costs, but the introduction of AI technology flips this equation, making the modernization process more efficient and posing a threat to IBM's traditional business model.
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Analyst Views on IBM
Wall Street analysts forecast IBM stock price to rise
16 Analyst Rating
11 Buy
4 Hold
1 Sell
Moderate Buy
Current: 243.140
Low
210.00
Averages
315.80
High
375.00
Current: 243.140
Low
210.00
Averages
315.80
High
375.00
About IBM
International Business Machines Corporation is a provider of global hybrid cloud and artificial intelligence (AI) and consulting expertise. The Company’s segments include Software, Consulting, Infrastructure and Financing. The Software segment includes hybrid cloud and AI platforms, which allow clients to realize their digital and AI transformations across the applications, data, and environments in which they operate. The Consulting segment focuses on integrating skills on strategy, experience, technology and operations by domain and industry. The Infrastructure segment is focused on the hybrid cloud infrastructure market, providing on-premises and cloud-based server and storage solutions. In addition, it offers a portfolio of life-cycle services for hybrid cloud infrastructure deployment. The Financing segment provides client and commercial financing, facilitating its clients’ acquisition of hardware, software and services. It helps clients in more than 175 countries.
About the author
Emily J. Thompson
Emily J. Thompson, a Chartered Financial Analyst (CFA) with 12 years in investment research, graduated with honors from the Wharton School. Specializing in industrial and technology stocks, she provides in-depth analysis for Intellectia’s earnings and market brief reports.
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