IBM stock sinks as Anthropic highlights Claude's ability to modernize old programming language
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The AI-driven software sell-off that ravaged markets in early February isn't over, with IBM stock tanking on Monday as Anthropic highlighted another disruptive use case for its AI agent.
IBM shares fell 13% after the maker of the Claude AI blogged about how Claude Code could help reduce the cost of COBOL (Common Business-Oriented Language) systems used by many businesses.
The term may not be widely known outside the software industry, but it quickly sent IBM stock into a nosedive in the latest installment of the software sell-off.
In its blog post, Anthropic laid out why COBOL matters and why people outside the tech community should care.
"COBOL is everywhere. It handles an estimated 95% of ATM transactions in the US," it wrote. "Hundreds of billions of lines of COBOL run in production every day, powering critical systems in finance, airlines, and government. Despite that, the number of people who understand it shrinks every year."
Among its uses, the company said the new tool could "Identify risks that would take human analysts months to surface." The new AI use case poses a potential threat to the kind of business data service that comprises a core part of IBM's business.
According to the startup, Claude will allow companies to streamline their COBOL operations for a fraction of their previous cost, similar to the legal plugins the company rolled out early in the month that triggered the initial software sell-off.
"Legacy code modernization stalled for years because understanding legacy code cost more than rewriting it. AI flips that equation," Anthropic said in its post.
Tech stocks initially bounced back after Anthropic's legal plugin release spooked Wall Street and caused investors to rush to limit their legal tech exposure, but the market was selling off sharply again on Monday.
Even before the Anthropic news hit IBM shares, the sector was tumbling earlier in the session as investors reacted to tariff uncertainty and a report making the rounds online that speculated about far-reaching negative impacts of AI.
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