NEW YORK – International Business Machines shares fell sharply on February 23 after artificial intelligence startup Anthropic announced that its Claude Code tool will help modernize COBOL, an outdated programming language that runs primarily on IBM computers.
The stock fell 13%, the biggest single-day decline since October 2000, according to data compiled by Bloomberg. The sell-off led to a 27% drop in shares in February, the biggest one-month decline since at least 1968, according to data compiled by Bloomberg.
“Modernizing a COBOL system used to require an army of consultants spending years mapping out workflows,” but “tools like Claude Code allow you to automate the exploration and analysis phase that consumes most of the effort in COBOL modernization,” Anthropic said in a blog post.
Most mainframe computers that run COBOL are made by IBM, and the recent drop in stock prices makes it the latest company to come under heavy selling pressure over concerns that AI will squeeze the growth prospects of traditional companies.
A significant portion of IBM’s business is still related to its mainframe business. These large customer-owned servers run applications in COBOL, a coding language that is older than those common in other technology industries. Mainframes are popular among customers who require high reliability, such as finance and government.
On February 20th, Anthropic introduced new security features to its Claude AI model, spurring a widespread sell-off in cybersecurity stocks. Software stocks fell in 2026 on concerns about AI-related disruption. Major software exchange-traded funds have fallen 27% this year, the biggest quarterly decline since the 2008 financial crisis.
Much of the selling has been in new AI tools released by companies like Anthropic, OpenAI, and Alphabet. Investors worry that the Vibecode feature, which uses AI to write software code, will allow users to create their own applications, reducing demand for legacy products and putting pressure on companies’ growth, margins and pricing power. bloomberg
