Anthropic’s Cobol Modernization Claim Causes IBM Stock to Plunge 13%
In Focus
- Anthropic said Claude Code can modernize IBM’s Cobol programming language
- Cobol runs on IBM’s mainframe computers
- IBM stock recorded the highest loss in over 25 years
IBM stock dropped by 13% on February 23, 2026. According to Yahoo Finance, this is the highest percentage loss the stock has had in over 25 years. The IBM stock crash was triggered by Anthropic’s claim that its Claude Code tool can support modernization of a dated programming language called Cobol, which runs on IBM computers.
“Modernizing a Cobol system once required armies of consultants spending years mapping workflows. Tools like Claude Code can automate the exploration and analysis phases that consume most of the effort in Cobol modernization,” Anthropic noted as cited by Yahoo Finance.
Mainframes are More Valuable than Cobol, IBM Says
IBM moved swiftly to defend its platform and debunk Anthropic’s Cobol AI modernization claim. The company said its mainframe computer division provides a platform with security and performance for different programming languages, not just Cobol
“The value IBM mainframe delivers has nothing to do with Cobol. The language is not the source of that value. The platform is,” IBM Senior Vice President, Rob Thomas stated.
IBM produces the majority of mainframe computers that support Cobol. The huge servers support some applications on Cobol. Compared to other coding languages that are now common in the tech industry, Cobol is much older. Customers like government and finance departments within companies still buy mainframe computers due to their reliability.
IBM’s worst drop since 2000 comes months after the company confirmed acquisition of data infrastructure firm Confluent in an $11 billion deal. The acquisition would allow IBM to offer an AI-powered smart data platform to enterprises.
Claude’s New Security Feature Sparks Selloff
Last week, Anthropic unveiled a Claude AI security feature, triggering a widespread cybersecurity stocks selloff. Earlier this month, the AI developer sparked a software and data analytics stock selloff across U.S. and European markets.
The selloff occurred following an AI update that introduced plug-ins that automate legal and marketing tasks. The update raised fears of an impending AI disruption in the software industry.
Besides the AI updates, investors are also concerned that the vibe coding, which involves the use of AI to write software code, could allow users to develop applications. This will likely reduce demand for legacy products and affect IBM’s margins, growth prospects, and pricing power.
“While we understand why mainframe migration could be a perceived negative for IBM, we would point out that IBM has already provided customers with several modernization options. Our sense is, clients already had the option to migrate from the mainframe, yet they are sticking with the platform,” Evercore ISI Analyst, Amit Daryanani said as reported by Yahoo Finance.
What the Stock Selloff Means for IBM
The recent stock selloff exposed IBM’s reliance on mainframe computers as its core revenue generator. It also highlights the impact of AI on the growth prospects of legacy firms. Following the 13% stock decline, IBM shares are down 27% this month. The company could reach its biggest slide in a single month since 1968.
