IBM became the latest stock caught in the crosshairs of AI disruption after Anthropic announced that its Claude Code tool can modernize legacy COBOL systems—long considered a core IBM stronghold. Shares of International Business Machines fell nearly 13% to close at $223.35, deepening the company’s year-to-date losses to over 24%.
The sell-off followed Anthropic’s blog post outlining how Claude Code can automate the complex analysis required for COBOL modernization. COBOL (Common Business-Oriented Language), developed in the late 1950s, remains deeply embedded in financial systems, airlines, retail, and government infrastructure. Anthropic estimates that roughly 95% of U.S. ATM transactions still rely on COBOL, underscoring the scale of legacy dependence.
IBM has historically generated substantial revenue from mainframe systems optimized for large-scale transaction processing, where COBOL dominates. Modernizing these systems has traditionally required costly, time-intensive consulting and human analysis—an area where IBM has built long-standing enterprise relationships.
Anthropic argues AI “flips the equation,” using large language models to map code dependencies, document workflows, and identify risks across massive codebases in a fraction of the time. If scalable, this could reduce modernization costs and shorten digital transformation cycles—potentially bypassing traditional vendors.
The development adds to growing investor anxiety about AI reshaping legacy enterprise software markets. Last week, cybersecurity stocks also declined after Anthropic unveiled AI-driven code security tools.
For IBM, the concern isn’t just about COBOL—it’s about whether AI-native automation compresses margins across high-value enterprise services long considered resilient.
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