IBM’s stock recently faced a significant drop, falling over 13% due to concerns that emerging AI tools from companies like Anthropic could threaten its legacy COBOL technology. These fears wiped out approximately $31 billion from IBM’s market capitalization. Although shares are showing a modest recovery, they have lost about 22% this year. Anthropic suggested in a recent blog post that its AI tools could modernize COBOL systems, highlighting a diminishing pool of engineers capable of working with the language. In response, IBM emphasized the complexity of data architecture and continued to showcase its AI innovations, such as the watsonX Code Assistant. Despite IBM’s efforts, mainframe sales—which constituted 23% of last year’s revenue—remain at risk from AI advancements. Although the company has demonstrated moderate growth and robust dividend yields, analysts suggest that the potential disruption from AI could make IBM less attractive compared to other tech investments.
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