IBM shares experienced a historic collapse this week, plummeting **13.2%** in a single session. This marks the company’s steepest one-day decline since October 2000. The selloff wiped out approximately **$31 billion** in market value, with the stock closing at **$223.35**. The catalyst for this downturn was an announcement from AI startup Anthropic regarding its "Claude Code" tool. The new technology claims to automate the modernization of COBOL, a legacy programming language that has served as a high-barrier "moat" for IBM’s consulting and mainframe business for decades. COBOL remains the backbone of global finance, powering an estimated **95%** of all ATM transactions in the United States. Traditionally, updating these systems required massive teams of specialists and years of manual effort. Anthropic claims its AI can now map dependencies and document workflows in quarters rather than years, directly threatening IBM's lucrative services model. This market reaction follows a period of significant growth for IBM. In 2025, the company outperformed the Dow Jones with a **35%** annual gain. Its generative AI book of business surged to **$12.5 billion** by the end of last year, up from **$5 billion** in 2024. Infrastructure revenue had also seen a **12%** jump, fueled by demand for the Z17 mainframe. However, the rapid advancement of AI-driven code migration has introduced fresh volatility. Beyond IBM, other IT consulting giants like Accenture and Cognizant also saw their shares retreat as investors reassess the long-term value of traditional legacy system maintenance. IBM’s stock is now down roughly **27%** for the month of February, putting it on track for its worst monthly performance since 1968. Despite this, IBM continues its own AI push through the Watsonx platform, which aims to refactor COBOL into Java. The company remains financially robust, reporting a record **$14.7 billion** in free cash flow for 2025. While the fundamental business remains profitable, the "Claude Code" update has shifted the narrative from IBM as an AI beneficiary to a potential target of AI disruption. Investors are now closely watching the rollout of "Project Bob" in 2026, which is expected to be IBM’s direct competitive response to these emerging automation tools. For now, the focus remains on whether IBM's integrated ecosystem can withstand the pressure of cheaper, faster AI-led modernization alternatives.