IBM has joined the ranks of large-scale tech enterprises to suffer a substantial stock price drop. On Monday (local time), artificial intelligence firm Anthropic revealed in a blog post that its Claude Code is capable of automating a portion of the modernization tasks for COBOL systems. In reaction to this news, IBM's stock price took a nosedive, plummeting by 13.2%. This made IBM the worst-performing stock among the components of the S&P 500 index.
Since the beginning of February, IBM's stock price has seen a cumulative decline of 26.8%. This could potentially represent its worst monthly performance since December 1992, and it marks the largest single-day drop since March 12, 2020.
The COBOL system underpins daily transactions across numerous critical sectors, and its modernization was once a highly profitable business for IBM. However, Anthropic's announcement has cast a pall over the future prospects of this business.
Previously, IBM was considered a low-key contender in the artificial intelligence arena, with its dominance in the COBOL sector acting as a crucial pillar for its business expansion. But Anthropic's announcement poses a direct threat to the traditional consulting model for COBOL modernization.
Furthermore, IBM is also in the process of developing its own artificial intelligence tools to streamline the modernization of COBOL systems.