On February 24, IBM’s stock plummeted 13%, marking its largest one-day drop in over 25 years. Investors expressed concerns over new AI tools, like Anthropic’s Claude Code, which could streamline the modernization of COBOL (Common Business-Oriented Language) code, jeopardizing IBM’s legacy mainframe services. COBOL, created in 1959, underpins critical systems in banking, government, and retail, managing 80% of in-person credit card and 95% of ATM transactions in the U.S. However, a shortage of COBOL programmers has led many firms to seek modernization solutions. Anthropic claims its AI can automate code analysis, significantly reducing costs and timelines for updating COBOL systems. In the wake of the blog post, IBM faced a steep selloff alongside other Indian IT firms. IBM’s leadership asserted that the company’s value lies beyond COBOL, focusing on the resilience and efficiency of its mainframe architecture. This situation underscores the evolving intersection of AI and legacy systems, impacting stock performance and market sentiment.
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