IBM Shares Drop Sharply After Anthropic Announces AI Tool for COBOL Modernization

IBM shares fell over 13%, marking their steepest daily drop since 2000, following AI startup Anthropic's announcement that its Claude Code tool can automate and accelerate modernization of COBOL, a legacy programming language widely used in banking, insurance, and government systems running on IBM mainframes. This development raised investor concerns about potential disruption to IBM's legacy software and consulting revenue. While some analysts view the sell-off as an overreaction, industry leaders suggest AI-driven modernization may lower costs and create new opportunities for IT service firms rather than replace them.