Anthropic's latest Claude Code update triggers massive IBM stock selloff, shares down 13.2% in a day

International Business Machines or IBM became the latest victim of the rapidly expanding AI power of Anthropic on Monday as the artificial intelligence company shared an update. IBM stock price on Monday took a hard hit and plunged to its lowest level in nearly three decades.

IBM shares fell 13.2%, suffering their worst day since 2000, at $223.35 per share, after Anthropic shared an update regarding Claude Code — the same AI tool that has created a rout in IT stocks over the past few weeks,

In a blog post on Monday, Anthropic said its Claude Code tool can help modernise Cobol, a dated programming language that is run on IBM computers. The AI startup revealed that Claude Code could now be used to automate the exploration and analysis that is the basis of Cobol modernisation complexities. IBM has for years sold mainframe systems that are optimised for processing large scale transactions, where Cobol has been used often.

With the decline, IBM shares have fallen 27% in February, on track for its biggest one-month slide since at least 1968, according to data compiled by Bloomberg.

What did Anthropic say on Claude Code update

In its blog post on Monday, Anthropic shared an update on its AI tool Claude Code.

“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,” Anthropic wrote.

“AI excels at streamlining the tasks that once made Cobol modernization cost-prohibitive.” it added.

Anthopic said that Claude Code can help modernise Cobol codebases.

“Modernizing a Cobol system once required armies of consultants spending years mapping workflows,” Anthropic wrote in the blog post. “Tools like Claude Code can automate the exploration and analysis phases that consume most of the effort in Cobol modernization.”

It said that Claude Code can map dependencies across thousands of lines of code, document workflows and identify risks that “would take human analysts months to surface.”

“Legacy code modernization stalled for years because understanding legacy code cost more than rewriting it. AI flips that equation,” the blog post said.

Why IBM shares bled?

Shares of IBM took a hit on this news as most of the mainframe computers that run Cobol are made by IBM, making it the latest victim of Anthropic's run to disrupt legacy code systems and companies’ digital transformation efforts.

The company saw heavy pressure on the fear that artificial intelligence will come in the way of the growth of big tech companies.

A significant chunk of IBM’s revenue remains tied to its mainframe business. These massive customer-owned servers run some applications on Cobol, a coding language that’s older than those now common in the rest of the technology industry. Mainframes are still purchased by customers with high reliability needs, such as those in finance or government.

Software stocks have this year seen a weaker run on fears that artificial intelligence will lead to disruption, with much of the sell off getting triggered on AI tools released by companies like Anthropic, OpenAI, and Alphabet.