Ibm Stock: ibm stock Drops 13.5% After Anthropic COBOL Warning
ibm stock sold off steeply on Monday, dropping 13. 5% after Anthropic renewed fears that AI code assistants could disrupt legacy COBOL workloads. The rout erased $31 billion in market value, and shares were up only slightly on Tuesday.
Ibm Stock and market reaction
The sell-off followed a new Anthropic (ANTH. PVT) blog post that argued AI can now automate analysis tasks that historically made modernization slow and costly. Anthropic said the post highlighted that hundreds of billions of lines of COBOL remain in daily production across finance, airlines, and government. The context for the move was described as an "AI scare trade" that "is taking no prisoners, " and the market reaction was characterized in the original coverage as one that "shot first and asked questions later, " producing the $31 billion loss in market value.
Anthropic's COBOL claim
Anthropic said its blog post emphasized COBOL's central role in mission-critical infrastructure, such as payments and financial systems, areas where IBM has been the leader for years. The company argued that AI can now automate analysis tasks that have historically slowed and raised the cost of modernization.
Evercore's defense and reasons
Evercore analyst Amit Daryanani argued that IBM has been investing in code modernization for years, citing skilling initiatives and IBM’s own generative AI capabilities. He noted that more than two years ago IBM launched watsonx Code Assistant for Z (IBM's mainframe) because the company sees AI as a tool for modernizing code. Daryanani stressed that while translating COBOL is the easy part, the real engineering challenge is "data architecture redesign, runtime replacement, transaction processing integrity, and hardware-accelerated performance built over decades of tight software and hardware coupling. "
Daryanani listed client reasons for sticking with mainframes in numbered form: 1) Reliability: 100% uptime and the ability to hot swap components (even the best run clouds might only have 5-6 nines of uptime), 2) speed, volume, & throughput, 3) better cost efficiency at scale, 4) On-prem AI inferencing capabilities for real-time analytics, 5) Security: Quantum-safe encryption, and 6) Regulatory Considerations: Mainframes are widely used by sensitive industry verticals such as governments, healthcare, & financial services (migrating to public cloud not an option). He said customers choose to remain on mainframe given these advantages despite the availability of alternatives for several decades.
Daryanani concluded that he believed "today's sell-off is unwarranted and would be buyers on weakness... Maintain Outperform rating and $345 target. " —Evercore analyst Amit Daryanani
Jefferies on software growth
Jefferies analyst Brent Thill framed IBM as "a software-driven story with multiple secular growth vectors across hybrid cloud, AI, automation and data. " He noted that mainframe software is an important contributor given its high margins and durability and cited that mainframe accounts for ~23%/29% of IBM's 2025 total revenue/software revenue. Thill argued that mainframe software is not the linchpin of IBM's broader software re-acceleration narrative, and that the push toward sustained 10%+ software growth is being driven by portfolio expansion in areas like Red Hat, watsonx, automation, and data platforms that extend well beyond Z. He described the sell-off as "a near-term sentiment overhang on legacy services rather than an existential or structural risk. " —Jefferies analyst Brent Thill
Earnings day note and incomplete quote
The original coverage notes that the reporter caught up with IBM's longtime CFO, Jim Kavanaugh, on Jan. 28 — IBM's earnings day — and intended to include his comments about customer demand. The text in the provided context contains a truncated quote beginning "I th"; that fragment is included in the preserved record and the remainder of the intended comment is unclear in the provided context.
Analysts and market participants in the provided coverage emphasized that the ibm stock rout reflected a sentiment-driven move tied to Anthropic's COBOL claims, while sell-side defenders cited IBM's decades of mainframe experience, recent watsonx investments, and broader software and hybrid cloud growth drivers.
Shares were down 13. 5% on Monday, the move wiped out $31 billion in market value, and shares were up only slightly on Tuesday, per the context provided.
Read more about the stock moves and market action in the original coverage if further detail is desired.
