IBM Defends After 13% Anthropic-Fueled Stock Drop: ‘New AI Tools Emerge Every Week,’ Cobol Modernization Challenges Remain

Anthropic unveiled new Claude functionality that can modernize COBOL code faster at scale, triggering a sharp drop in IBM stock on Monday.

• IBM says new AI tools do not address the ‘fundamental engineering challenge of running mission-critical workloads at scale.’
• IBM charges clients to modernize their financial systems running on Cobol, a business that is under threat from the new Anthropic tool.
• New Claude capabilities, ranging from code debugging to enterprise security assessments, have triggered a broad selloff in software stocks. 

International Business Machines Corp. on Tuesday highlighted its own technological strengths after Anthropic unveiled a new Claude feature designed to modernize the legacy code running on IBM systems, a development that sent IBM’s shares sharply lower the previous day.

“New AI tools emerge every week, including our own,” IBM said in a response to a Yahoo Finance post. “What they do not change is the fundamental engineering challenge of running mission-critical workloads at scale.”

The company said it has been investing in code modernization for years, both through skilling initiatives and through generative AI tools such as the Watsonx Code Assistant for Z launched two years ago.

“Translating COBOL is the easy part. The real work is data architecture redesign, runtime replacement, transaction processing integrity, and hardware-accelerated performance built over decades of tight software and hardware coupling,” IBM said, according to its statement reshared by Yahoo Finance Executive Editor Brian Sozzi on X.

IBM Stock Dropped The Most In Over 25 Years

IBM stock plummeted 13.2% on Monday, its worst single-day performance since October 2000. Earlier in the day, Anthropic detailed new capabilities in its Claude Code tool that can modernize legacy systems running Common Business-Oriented Language (COBOL) at a scale and speed never seen before.

“Modernizing a Cobol system once required armies of consultants spending years mapping workflows,” Anthropic wrote in a blog post. “Tools like Claude Code can automate the exploration and analysis phases that consume most of the effort in Cobol modernization.”

COBOL is an old programming language widely used on IBM mainframes, systems that still process a significant share of global financial transactions. Modernizing these legacy applications to newer architectures or languages, such as Java, is complex and often takes years and costs millions of dollars. 

IBM provides tools and consulting services to help banks and other enterprises gradually modernize or integrate their COBOL-based systems.

In an investor note earlier, Jefferies argued that the Anthropic threat is less severe than investors perceive and that IBM’s trajectory hinges more on growth in hybrid cloud, AI, and data, which it believes remains strong.

AI-linked Software Selloff

The selloff in IBM stock is only the latest triggered by AI fears, notably those surrounding Anthropic's AI rollouts. Last week, the AI company unveiled new security capabilities in Claude Code, and sparked a major selloff in cybersecurity stocks like Palo Alto Networks and CrowdStrike.  

For updates and corrections, email newsroom[at]stocktwits[dot]com.<