IBM shares plunge as Anthropic touts COBOL modernization efforts

Most of the mainframe computers that run COBOL are made by IBM, and the selloff made the company the latest to see heavy selling pressure on AI fears. Photo by David Paul Morris/Bloomberg/Postmedia filesArticle contentInternational Business Machines Corp. shares plunged on Monday, after the artificial intelligence startup Anthropic said its Claude Code tool can help with modernizing COBOL, a dated programming language that’s mainly run on IBM computers.Sign In or Create an AccountEmail AddressContinueor View more offersArticle contentShares sank as much as 13 per cent, their biggest intraday drop since March 2020. With the decline, the stock is now down 26 per cent in February, on track for its biggest one-month percentage decline since at least 1968, according to data compiled by Bloomberg.Article contentWe apologize, but this video has failed to load.Try refreshing your browser, ortap here to see other videos from our team.We apologize, but this video has failed to load.Try refreshing your browser, ortap here to see other videos from our team.Play VideoArticle contentArticle content“Modernizing a COBOL system once required armies of consultants spending years mapping workflows” but “tools like Claude Code can automate the exploration and analysis phases that consume most of the effort in COBOL modernization,” Anthropic wrote in a blog post.Article contentArticle contentInvestorCanada's best source for investing news, analysis and insight.There was an error, please provide a valid email address.Sign UpBy signing up you consent to receive the above newsletter from Postmedia Network Inc.Thanks for signing up!A welcome email is on its way. If you don't see it, please check your junk folder.The next issue of Investor will soon be in your inbox.We encountered an issue signing you up. Please try againInterested in more newsletters? Browse here.Article contentMost of the mainframe computers that run COBOL are made by IBM, and the selloff made the company the latest to see heavy selling pressure on the fear that AI will weigh on the growth prospects of legacy companies.Article contentA significant chunk of IBM’s business remains tied to its mainframe business. These massive customer-owned servers run applications on COBOL, an older coding language than those in common in the rest of the technology industry. Mainframes are common among customers with high reliability needs, such as finance or government.Article contentOn Friday, Anthropic introduced a new security feature into its Claude AI model, spurring widespread selling of cybersecurity stocks. Software stocks have been broadly weaker this year on concerns over AI-related disruption; a major software ETF is down 27 per cent this year, on track for its biggest one-quarter drop since the financial crisis in 2008.Article contentMuch of the selling has come on new AI tools released by companies like Anthropic, OpenAI, and Alphabet Inc. Investors are fretting that the ability to “vibe code” — use AI to write software code — will allow users to create their own applications, diminishing demand for legacy products, weighing on companies’ growth, margins, and pricing power.Article content—With assistance from Brody Ford.Article contentBloomberg.comArticle contentWe apologize, but this video has failed to load.Try refreshing your browser, ortap here to see other videos from our team.Play VideoArticle contentTrending Posthaste: Forget tariffs, here's how Trump is really making money off Canada News Subscriber only. Garry Marr: There's a great divide in Canada's office real estate market and it's creating big winners and big losers Subscriber only Commercial Real Estate Loblaw plans $2.4-billion investment in 2026, including 70 new stores Retail & Marketing Trump family’s crypto venture says it faced ‘coordinated attack’ Cryptocurrency What you need to know about filing to the CRA this year as tax season looms Personal Finance Share this article in your social networkCommentsYou must be logged in to join the discussion or read more comments.Create an AccountSign in Join the Conversation Postmedia is committed to maintaining a lively but civil forum for discussion. Please keep comments relevant and respectful. Comments may take up to an hour to appear on the site. You will receive an email if there is a reply to your comment, an update to a thread you follow or if a user you follow comments. Visit our Community Guidelines for more information. Posthaste: Forget tariffs, here's how Trump is really making money off Canada News Subscriber only. Garry Marr: There's a great divide in Canada's office real estate market and it's creating big winners and big losers Subscriber only Commercial Real Estate Loblaw plans $2.4-billion investment in 2026, including 70 new stores Retail & Marketing Trump family’s crypto venture says it faced ‘coordinated attack’ Cryptocurrency What you need to know about filing to the CRA this year as tax season looms Personal Finance