IBM stock plunged 13% on Monday following an Anthropic blog post that unveiled a new application for Claude Code, the company’s artificial intelligence agent. The AI firm announced that its tool could assist businesses in modernizing legacy COBOL systems, technology that underpins critical infrastructure across multiple industries.
According to Anthropic’s announcement, Claude Code can help companies reduce the substantial costs associated with maintaining COBOL (Common Business-Oriented Language) systems. The development represents another disruptive use case for AI agents and extends the software sector sell-off that began earlier in February.
COBOL Modernization Emerges as AI Target
In its blog post, Anthropic explained the widespread importance of COBOL in modern business operations. The language handles an estimated 95% of ATM transactions in the United States, according to the company. Additionally, hundreds of billions of lines of COBOL code run in production daily, powering essential systems in finance, airlines, and government sectors.
However, the number of professionals who understand COBOL shrinks every year, creating a critical skills gap. This demographic challenge has made COBOL maintenance increasingly expensive for organizations that rely on the aging technology.
IBM Business Model Faces AI Disruption
The announcement poses a direct threat to IBM’s core business operations, which include data services that involve managing and maintaining legacy systems. Among its capabilities, Anthropic said the new tool could “identify risks that would take human analysts months to surface.” This efficiency gain could dramatically reduce the need for traditional consulting services.
Meanwhile, Anthropic emphasized the economic implications of AI-powered COBOL modernization. “Legacy code modernization stalled for years because understanding legacy code cost more than rewriting it. AI flips that equation,” the company stated in its post.
Broader Software Sector Sell-Off Continues
The IBM stock decline extends a pattern of AI-driven disruption affecting software companies. Earlier in February, Anthropic’s announcement of legal plugins for Claude Code triggered a similar market reaction, causing investors to reduce exposure to legal technology stocks. The sector experienced a brief recovery before Monday’s renewed selling pressure.
Additionally, tech stocks faced headwinds from multiple sources on Monday beyond the Anthropic news. Investors reacted to ongoing tariff uncertainty and circulating reports about potential negative impacts of artificial intelligence on employment and economic stability.
AI Agents Reshape Enterprise Software Landscape
The Anthropic flurry of updates in recent weeks has consistently hammered software shares as investors reassess valuations across the sector. Claude Code’s expanding capabilities demonstrate how AI agents could automate tasks previously requiring specialized human expertise and extensive consulting engagements.
In contrast to traditional COBOL modernization approaches that required substantial investments in human resources, AI-powered solutions promise to complete similar work at a fraction of previous costs. This cost differential could accelerate adoption among enterprises seeking to modernize their technology stacks while controlling expenses.
Market analysts have not yet determined whether Monday’s sharp decline in IBM stock represents a temporary overreaction or signals a fundamental reassessment of the company’s business model viability. The extent to which Claude Code and similar AI tools can actually deliver on their COBOL modernization promises remains to be demonstrated through real-world implementations, though investor sentiment has clearly shifted in anticipation of potential disruption.
