International Business Machines (IBM) has become the latest casualty of rapid AI technology advancements, with its stock price suffering a significant decline following Anthropic's announcement that its Claude AI can now handle COBOL-related tasks. During Monday afternoon trading, IBM shares plummeted 11%. This drop occurred after Anthropic revealed a new application for its Claude Code product: automating the most complex code exploration and analysis work involved in modernizing COBOL systems.
COBOL (Common Business-Oriented Language) is a decades-old programming language widely used in business data processing, which constitutes a core business segment for IBM. Numerous transaction systems still operate on COBOL, including payment processing and retail transaction systems, making them prime targets for cost-effective AI-driven modernization. In a blog post on Monday, Anthropic noted, for example, that approximately 95% of ATM transactions in the United States are processed by COBOL.
"Trillions of lines of COBOL code run in production environments daily, supporting critical systems in finance, aviation, and government sectors. However, the number of people proficient in this language continues to decline each year," Anthropic stated in the blog. "AI excels at simplifying tasks that previously made COBOL modernization prohibitively expensive."
The article further explained that Claude Code can assist in modernizing COBOL codebases by mapping dependencies across thousands of lines of code, documenting workflows, and identifying risks that "would take human analysts months to discover." "Legacy code modernization has stalled for years because understanding old code was more costly than rewriting it. AI has completely changed this equation," the blog added.
IBM is the most recent stock to decline due to AI-related concerns. In recent weeks, AI developments have persistently unsettled investors, creating a volatile "sell first, ask questions later" market environment. Last Friday, after Anthropic announced new code security scanning features for Claude Code, shares of several cybersecurity companies fell sharply, and the sector remained under pressure during Monday's trading.
Monday's sell-off has pushed IBM's stock down nearly 22% year-to-date.