Mumbai, February 24 – IBM’s stock suffered its worst single-day drop in over 25 years, tumbling 13.2% to close at $223.35. The dramatic fall came amid growing fears that artificial intelligence could disrupt the company’s lucrative business maintaining outdated enterprise software systems.
This year’s decline now totals nearly 25% for IBM shares, as investors reassess how quickly AI might upend traditional IT services and enterprise software models. The trigger was a blog post from AI startup Anthropic, boasting that its ‘Claude Code’ tool can comprehend and modernize COBOL, the ancient programming language from the 1950s still powering critical global infrastructure.
COBOL remains the backbone of banks, airlines, insurance firms, and government operations worldwide, including IBM’s vital mainframe business. Updating these systems has historically been a slow, expensive ordeal reliant on scarce expertise and large consulting teams—precisely the revenue stream that’s kept IBM steady for decades.
Anthropic’s revelation highlights a seismic shift. With hundreds of billions of lines of live COBOL code in operation and experts dwindling, AI promises to analyze vast codebases, map dependencies, generate documentation, and spot risks in days rather than months. ‘Modernization has been stalled for years because understanding legacy code often costs more than rewriting it,’ Anthropic noted. ‘AI changes that equation entirely.’
In the U.S. alone, 95% of ATM transactions still run on COBOL, underscoring its entrenched role. As AI tools like Claude Code prove capable of tackling these complexities, companies like IBM face existential questions about their maintenance-heavy business model. Investors are fleeing, signaling the end of an era for legacy tech giants.