IBM Business Model At Risk? Anthropic's Claude Can Modernise COBOL Code; Stocks Fall 13%

Shares of IBM experienced a significant decline of 13% following a statement from Anthropic regarding its Claude Code, which has the capability to automate the modernisation of COBOL code. COBOL, a programming language that has been essential for IBM's mainframe and legacy IT services, is increasingly seen as outdated. The introduction of Claude Code poses a considerable threat to IBM's revenue stream, as many businesses still rely on COBOL for their core operations. As companies seek to modernise their IT infrastructure, the ability to automate COBOL code could lead to a shift away from traditional IBM services, raising concerns about the company's future profitability. This development highlights the growing competition in the tech sector, particularly from AI-driven solutions that offer innovative ways to address longstanding challenges in legacy systems. The market's reaction reflects investor anxiety over IBM's adaptability in an evolving technological landscape, prompting questions about the company's strategy to retain its position in the industry.