IBM shares closed Monday at $223.35, down 13.2%. Reuters reports this marks the company's biggest single-day decline since October 18, 2000.
The drop came after Anthropic's Monday blog post announcing that its Claude Code tool can modernize COBOL systems. COBOL is a programming language widely used on IBM mainframes across banking, insurance, and government systems.
"Modernizing a COBOL system once required armies of consultants spending years mapping workflows," Anthropic wrote. "Tools like Claude Code can automate the exploration and analysis phases that consume most of the effort in COBOL modernization."
The company says Claude Code can map dependencies across thousands of lines of code, document workflows, and identify risks. "With AI, teams can modernize their COBOL codebase in quarters instead of years," according to the post.
COBOL handles an estimated 95% of ATM transactions in the U.S., Anthropic says. Hundreds of billions of lines of COBOL code run in production daily. The company notes that the number of people who understand COBOL shrinks every year, with the programming language taught at only a handful of universities.
Reuters reports IBM shares have dropped 27% in February, on track for the company's worst monthly performance since at least 1968.
Damilare Odedina
What Claude Code does
According to Anthropic's blog post, Claude Code maps program entry points and traces the exact step-by-step paths the software takes as it jumps between different, interconnected chunks of code (subroutines) to perform specific tasks. It identifies data flows between modules and documents dependencies that span hundreds of files.
The tool finds what Anthropic calls "implicit dependencies"—shared data structures, file operations that create coupling between modules, and initialization sequences that affect runtime behavior.
Anthropic writes: "They're also exactly what makes COBOL modernization risky, which is why automated discovery matters: it finds these hidden relationships before they cause problems during migration."
Claude Code produces diagrams and written descriptions of processing pipelines. It also assesses which components are safe to move and which need careful handling.
Anthropic released a Code Modernization Playbook with Monday's announcement. The document outlines automated exploration and discovery, risk analysis and opportunity mapping, strategic planning with expert oversight, and incremental implementation with continuous validation.
The company says each modernization step either succeeds and gets validated, or fails and gets corrected while the scope is small.
Market reaction Monday
Accenture and Cognizant Technology Solutions shares both declined Monday. These companies generate revenue from legacy system modernization consulting work.
CrowdStrike and Datadog shares also dropped. Reuters reports this follows Anthropic's Friday announcement of a tool that scans codebases for security vulnerabilities.
The S&P 500 closed down 1.04% Monday. The Dow Jones Industrial Average fell 1.66%.
Reuters writes that this is because "Software stocks have been battered in recent months by market fears around the growing capabilities of AI tools, particularly following the launch of plug-ins from Anthropic's large language model Claude."
Damilare Odedina
