IBM shares sink most in 25 years as company becomes the latest AI casualty
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IBM shares tanked 13 per cent on Anthropic programming language threat.
PHOTO: REUTERS
NEW YORK - IBM shares plunged on Feb 23, after the artificial intelligence start-up Anthropic said its Claude Code tool can help with modernising COBOL, a dated programming language that is mainly run on IBM computers.
Shares sank 13 per cent in their biggest one-day percentage loss since October 2000. With the decline, the stock is now down 27 per cent in February, on track for IBM’s biggest one-month percentage decline since at least 1968, according to data compiled by Bloomberg.
“Modernising a COBOL system once required armies of consultants spending years mapping workflows” but “tools like Claude Code can automate the exploration and analysis phases that consume most of the effort in COBOL modernisation”, Anthropic wrote in a blog post.
Most of the mainframe computers that run COBOL are made by IBM, and the sell-off made the company the latest to see heavy selling pressure on the fear that AI will weigh on the growth prospects of legacy companies.
A significant chunk of IBM’s business remains tied to its mainframe business. These massive customer-owned servers run applications on COBOL, an older coding language than those common in the rest of the technology industry. Mainframes are common among customers with high reliability needs, such as finance or government.
On Feb 20, Anthropic introduced a new security feature into its Claude AI model, spurring widespread selling of cybersecurity stocks.
Software stocks have slumped in 2026 on concerns over AI-related disruption; a major software exchange-traded fund is down 27 per cent in 2026, on track for its biggest one-quarter drop since the financial crisis in 2008.
Much of the selling has come on new AI tools released by companies such as Anthropic, OpenAI and Alphabet.
Investors are fretting that the ability to “vibe code” – use AI to write software code – will allow users to create their own applications, diminishing demand for legacy products, and weighing on companies’ growth, margins and pricing power. BLOOMBERG
