TLDR
- IBM shares have tumbled 28.6% over the past month, sliding from $312.95 down to $223.35
- Anthropic’s announcement showcasing COBOL capabilities in Claude Code sparked investor panic over IBM’s legacy revenue streams
- Analyst Brent Thill from Jefferies reaffirmed his Buy recommendation with a $370 target, viewing the decline as a purchase opportunity
- IBM has offered watsonx Code Assistant for Z since late 2023, which already uses AI to translate COBOL into Java
- A fresh collaboration with Deepgram positions IBM’s watsonx Orchestrate as the platform’s inaugural voice AI integration
International Business Machines has endured a punishing stretch. Shares have shed 28.6% in less than 30 days, tumbling from $312.95 on February 2 down to $223.35, hovering dangerously close to its 52-week nadir.
The most devastating hit occurred when the stock cratered 13% in a single session — marking the steepest one-day plunge since the turn of the millennium.
The trigger? A blog entry from Anthropic. The artificial intelligence firm showcased COBOL capabilities within its Claude Code offering, emphasizing that hundreds of billions of COBOL code lines still power critical systems in banking, aviation, and public sector operations.
International Business Machines Corporation, IBM
This revelation rattled the market. IBM has maintained a dominant position in COBOL-reliant infrastructure, particularly in payment systems and financial backbone services. The concern: artificial intelligence tools could chip away at demand for IBM’s traditional COBOL maintenance business.
The wider decline also mirrors a broader market rotation out of established technology names, as capital flows toward quantum computing ventures and fixed-income securities offering attractive yields.
Jefferies Stands Firm on IBM
While many investors fled, Jefferies analyst Brent Thill doubled down on his conviction, asserting that IBM is “already disrupting itself.”
Thill highlighted IBM’s watsonx Code Assistant for Z, a tool that reached general availability in Q4 2023. This solution leverages generative AI to translate COBOL to Java, decode production systems, and modernize aging applications.
According to Thill, this positions IBM with a competitive moat against generic AI coding platforms that can’t directly tap into mainframe environments or enterprise-specific operational data.
Thill also emphasized that IBM is preparing for an “agentic, multi-model future” through strategic alliances with Anthropic, OpenAI, and additional players — indicating that perceived competitors are simultaneously collaborative partners.
He characterized the downturn as a “short-term sentiment cloud over legacy operations rather than a fundamental or existential threat” and reiterated his Buy stance with a $370 valuation target, suggesting 66% appreciation potential from present levels.
Eleven additional analysts echo his optimistic outlook. Five rate the stock as Hold while one recommends Sell, resulting in a Moderate Buy consensus across Wall Street. The mean price objective stands at $337.53, implying approximately 51% gains over the coming year.
IBM Integrates Voice AI Technology
On the identical day, IBM unveiled a partnership with Deepgram, establishing it as IBM’s inaugural voice artificial intelligence collaborator.
Deepgram’s speech recognition and voice synthesis capabilities will integrate directly into IBM’s watsonx Orchestrate ecosystem, enabling users to command AI agents through conversational voice inputs.
The solution accommodates numerous languages and regional accents, spanning Arabic and Indian English variations, with applications spanning customer support, call center analytics, and voice-activated data capture in medical and financial sectors.
IBM’s price-to-earnings multiple currently registers at 20.3, with at least one valuation model indicating the shares trade below intrinsic worth.
Looking at historical patterns, IBM has experienced just one comparable drawdown exceeding 30% within a 30-day window since 2010. Following that previous episode, the stock delivered a maximum rebound of 42% over the subsequent 12-month period.
