Anthropic’s COBOL tool triggers worst single-day drop in 25 years in IBM's stock price: What it is and why it wiped billions of dollar for IBM
Times of India
by TOI TECH DESKFebruary 24, 2026
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IBM's stock experienced its worst single-day drop in over 25 years on February 23, 2023, following the announcement by AI startup Anthropic of its Claude Code tool, which can automate the modernization of COBOL—a decades-old programming language critical to IBM's mainframe business. The stock fell 13.2%, wiping $40 billion from IBM's market value and causing a significant year-to-date decline. This sharp drop was triggered by Anthropic's claim that AI tools like Claude Code can drastically reduce the time and cost of COBOL modernization, potentially disrupting IBM's lucrative consulting and services business.
COBOL, or Common Business-Oriented Language, is a foundational language for processing financial transactions, payroll systems, and government records. Despite its age, it remains integral to global infrastructure, with 95% of U.S. ATM transactions and 80% of credit card swipes relying on COBOL. Much of this code runs on IBM mainframes, which generate recurring revenue for the company through hardware refresh cycles and software licenses.
However, the shrinking pool of skilled COBOL developers has created a significant challenge for organizations. Fewer young professionals are trained in COBOL due to its reputation as a less appealing career path compared to modern programming languages like Java or Python. This talent shortage has led to costly delays and disruptions when migrating from legacy systems, especially during crises like the COVID-19 pandemic.
Anthropic's announcement highlights the potential of AI to address this bottleneck. The Claude Code tool can analyze thousands of lines of COBOL code, identify dependencies, document workflows, and generate modernized versions in languages like Java or Python within weeks rather than years. This innovation could revolutionize how organizations handle legacy systems, reducing reliance on expensive human consultants.
The implications for IBM are significant. If AI tools can streamline COBOL modernization, a major portion of the company's revenue from consulting services and mainframe support could be at risk. While Anthropic's offering
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Originally published on Times of India on 2/24/2026