IBM shares experienced a significant decline on Monday, driven by concerns over the impact of Anthropic's Claude Code product, which can translate COBOL, on the technology giant's legacy operations. However, investment firm Jefferies emphasized that the sell-off, which marked IBM's largest single-day drop in 26 years, disregarded crucial aspects of the company's ongoing self-renewal. Analyst Brent Thill stated in a client note, "We believe market concerns overlook a key point: IBM is proactively advancing its own transformation. Its Watsonx Code Assistant for Z embeds generative AI directly into mainframe systems, facilitating the conversion of COBOL to Java and enabling application modernization within a complete system environment. It is important to note that the reacceleration of IBM's software business is not reliant on mainframes but is driven by overall momentum in hybrid cloud, artificial intelligence, automation, and data." Thill maintained a "buy" rating on IBM with a $370 price target. He added that Watsonx Code Assistant for Z, commercially available for over two years, uses generative AI to refactor COBOL into Java, eliminating the burden of traditional mainframe modernization. The tool not only interprets production code and modernizes applications but also preserves critical operational logic. "By embedding these capabilities directly into the Z platform, IBM holds a structural advantage over horizontal code assistants—which, while powerful, lack native access to mainframe data, tools, and operational environments. Mainframe modernization goes far beyond simple code conversion and documentation; it requires deep integration with operational resilience, performance tuning, and change management, areas where IBM plays a central role. From a broader perspective, IBM is building a multi-model, agent-driven technology ecosystem through collaborations with providers such as Anthropic and OpenAI. These AI agents will ultimately need to integrate deeply with enterprise data and hybrid cloud architectures, and IBM's data layer, connectors, and platform integration capabilities give it a differentiated advantage in this space." Thill also highlighted that the resilience of mainframe business exceeds most investors' expectations. IBM previously indicated that its mainframe business continues to grow, with 70% of customers expanding related workloads. "Currently, approximately 73% of global transaction volume is still processed by mainframes, supporting critical mission systems across industries, underscoring the platform's deep-rooted and irreplaceable nature."