What Happened
IBM (IBM) stock experienced a significant decline on Monday, dropping nearly 13.2% to close at $223.35 per share. This sell-off was triggered by investor concerns regarding the potential impact of Anthropic’s newly announced AI tool, Claude Code, which is designed to modernize legacy COBOL systems.
Why It Matters
COBOL, or Common Business-Oriented Language, is a programming language that has been in use since the 1960s and is critical to many business operations, handling approximately 95% of ATM transactions in the U.S. Anthropic’s announcement highlighted how its Claude Code tool could automate the exploration and analysis phases necessary for modernizing COBOL code, posing a direct threat to IBM’s core business of providing mainframe systems optimized for transaction processing. The rapid development of AI technologies has raised fears among investors that traditional software businesses, including IBM, may face significant disruptions.
What’s Next
As the AI-driven software sell-off continues, analysts will be closely monitoring IBM’s response to these emerging technologies and the potential long-term effects on its business model. The company may need to adapt its strategies to remain competitive in an increasingly AI-centric market.
