The Times Of India·2026-02-24 05:00Core Viewpoint - IBM's share price has significantly declined due to concerns that advancements in artificial intelligence, particularly tools like Anthropic's Claude Code, could disrupt the company's legacy technology business model [2][5]. Group 1: Stock Performance - IBM's stock dropped as much as 13% during intraday trading, marking its steepest single-day fall since March 2020 [3][5]. - Following this decline, IBM shares are down 26% for February, positioning them for their largest monthly percentage decline since at least 1968, according to Bloomberg data [3][5]. Group 2: Impact of AI on Legacy Technology - The majority of mainframe computers running COBOL, an aging programming language, are produced by IBM, making the company particularly vulnerable to AI advancements [4][5]. - Anthropic's Claude Code tool can automate the traditionally labor-intensive process of updating COBOL systems, raising concerns about the future demand for IBM's mainframe services [5][6]. - Investors are increasingly worried that AI-driven tools could enable users to create their own applications, potentially reducing reliance on established software offerings and impacting revenue growth, profit margins, and pricing power for legacy technology firms [4][6]. Group 3: Broader Market Context - The software sector has faced challenges this year, with a leading software-focused exchange-traded fund declining 27% so far, on track for its steepest quarterly drop since the 2008 financial crisis [4][6]. - The market pressure has intensified following the launch of new AI-driven tools from companies like Anthropic, OpenAI, and Alphabet Inc., contributing to a broader sell-off in technology stocks [4][6].