IBM Stock Falls Sharply Amid AI Disruption Concerns
Shares of International Business Machines Corporation (IBM) plunged about 13 % on February 23, 2026, marking their steepest single-day drop in more than 25 years — a move not seen since the early 2000s and their worst in decades amid market volatility. The sell-off erased billions of dollars in market value in a single session, with some estimates putting the decline at around $30 billion or more.
💡 What Triggered the Move
The sharp sell-off followed an announcement from Anthropic PBC, a startup backed by major tech investors, about its new “Claude Code” AI tool — designed to modernize legacy COBOL systems more quickly and cost-effectively using generative AI. COBOL is a decades-old programming language still widely used on IBM’s mainframe platforms in sectors such as banking, insurance, and government.
Investors interpreted Anthropic’s claims as a potential threat to IBM’s long-established revenue streams related to legacy systems and consulting work, sparking broader concern about how rapidly AI could disrupt traditional enterprise technology businesses. Other technology and cybersecurity stocks also experienced selling pressure amid the market reaction.
📊 Market Context and Analyst Views
Some market watchers noted that the reaction may have been overly aggressive or short-lived, with IBM shares later staging minor rebounds as analysts highlighted the company’s entrenched position in large enterprise IT and its own AI initiatives. Longer-term views vary, with debate about how much impact tools like Claude Code will have on complex legacy modernization projects.
IBM share trend
IBM’s share price fell by almost 27 percent in February alone. This is a huge loss. It has fallen by 23 percent since the beginning of this year (YTD). It has fallen by more than 6 percent in the last 6 months and by 15 percent in the last year. This fall has affected US IT stocks. Indian IT companies have also been affected.
Impact on Indian IT companies
Today, shares of Indian IT giants like TCS, Infosys, Wipro, HCL Tech, and Tech Mahindra fell sharply. The market cap of these companies fell by Rs. 84,000 crore in a single day.
- TCS is the largest mainframe/COBOL employing company in India. It services global bank clients.
- Infosys also hires mainframe developers and system programmers for COBOL based systems.
- Companies like Wipro and Coforge also do COBOL projects.
Investors are selling IT stocks on fears that AI will quickly replace old systems. But some say this is an overreaction and that IBM’s business is still strong. It remains to be seen what happens in the coming days.
