IBM Stock Suffers Worst Crash in 25 Years — Anthropic's Claude Code Shakes the COBOL Empire
IBM stock is at the center of one of the biggest tech stories of February 2026 — a historic single-day collapse triggered by an AI announcement that spooked investors about the future of one of the company's most durable revenue streams. Here is everything you need to know about IBM stock today and where analysts think it goes from here.
IBM Stock Crashes 13% — Worst Day Since the Dot-Com Bubble
IBM shares had their worst single day in more than 25 years on Monday, plunging 13% in their biggest single-session percentage loss since October 2000. With the decline, IBM shares fell 27% in February, putting the stock on track for its biggest one-month slide since at least 1968.
IBM shares declined to $223.35 on Monday, their sharpest single-day drop since the Dot-Com bubble. The catalyst was Anthropic's announcement of new capabilities in its Claude Code tool designed to modernize legacy systems running COBOL — a programming language that runs predominantly on IBM mainframe computers.
What Is COBOL and Why Does It Threaten IBM Stock
The IBM stock selloff came down to one specific business vulnerability that investors had long underestimated. COBOL is a decades-old programming language that underpins banking, government, insurance, and financial systems worldwide — and IBM has been the dominant hardware and services provider for those systems.
Anthropic wrote in its announcement: "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." Legacy code modernization, the company said, "stalled for years because understanding legacy code cost more than rewriting it. AI flips that equation."
IBM's stock is now down over 24% year to date and approximately 31% from its 52-week high of $341.90 set on November 11, 2025. The selloff has wiped billions in market value from one of the most storied technology companies in American history.
Wall Street's Reaction: Panic vs. Perspective
Not everyone on Wall Street agrees the IBM stock collapse is justified. Several major firms pushed back on the severity of the market reaction within hours.
Jefferies sought to calm investor jitters and maintained a Buy rating on IBM with a $370 price target, arguing that IBM's much-anticipated "re-acceleration" will ultimately depend on broader industry demand for cloud, AI, and automation — and that the COBOL threat covers "only a small share of overall revenue, in the low single-digit percentage range." IBM's biggest revenue drivers are software, consulting, and hybrid cloud — not COBOL modernization alone.
By Tuesday, IBM stock had already begun recovering, rising 2.67% as analysts broadly deemed the recent selloff overdone, highlighting the company's strong fundamentals and AI adaptability while the broader tech sector gained 1.3%.
IBM's Business Fundamentals Tell a Different Story
The dramatic February collapse stands in contrast to IBM's most recent financial performance, which had been one of the strongest in years heading into 2026.
For the full year 2025, IBM reported total revenue of $67.5 billion, up 8% on a reported basis — its strongest annual growth rate in several years. Software revenue led the way with an 11% increase, free cash flow reached a record $14.7 billion, and Q4 earnings per share of $4.52 came in ahead of analyst forecasts.
IBM also secured a major defense contract with the U.S. Missile Defense Agency's $151 billion SHIELD program in February, and recently agreed to acquire cloud company Confluent in an $11 billion deal. IBM's official 2026 guidance calls for more than 5% constant-currency revenue growth and another $1 billion increase in free cash flow.
IBM Stock Outlook: What Analysts Say Now
The question the market is wrestling with is whether the IBM stock drop represents a genuine long-term structural threat or a textbook overreaction to AI hype.
Of 22 analysts currently covering IBM stock, 11 rate it a Buy, with a consensus price target of $320.38. Oppenheimer analyst Param Singh named IBM one of his top picks for 2026 at the start of the year with an Outperform rating and a $360 target, projecting overall revenue up 6% for the year with a 9% increase in software revenue.
IBM's stock price rose 36% in 2024 and 35% in 2025, but is now down more than 21% in 2026. Technical indicators as of today lean bearish, with resistance levels at $306 and $335 and support at $210 and $181. Whether IBM can reverse course before the end of the first quarter depends heavily on upcoming earnings reports, any further AI announcements, and clarity on the global tariff environment that has added further pressure to the stock.
