"The most violent move came in a single session when Anthropic announced that its Claude Code tool is positioned as an ideal solution for code modernization, including COBOL legacy system work. That announcement hit IBM where it hurts most. A significant portion of IBM's consulting revenue comes from exactly that kind of work: helping large enterprises modernize aging mainframe and legacy codebases."
"IBM is a more than a century old technology company that has spent the better part of the past decade repositioning itself around hybrid cloud and AI. Under CEO Arvind Krishna, the company shed its managed infrastructure business (spun off as Kyndryl in 2021) and doubled down on software, consulting, and its Watsonx AI platform."
IBM trades at $229.32 with analyst targets at $324.95, representing a 41.7% gap requiring explanation. The century-old technology company has repositioned around hybrid cloud and AI under CEO Arvind Krishna, shedding its managed infrastructure business and focusing on software, consulting, and Watsonx AI. Strong 2025 performance and raised guidance reversed sharply in 2026. A 13% single-day crash followed Anthropic's announcement that Claude Code handles COBOL legacy system modernization—work central to IBM's high-margin consulting revenue. This structural threat to IBM's core business model triggered the severe market reaction, raising questions about whether current valuations represent opportunity or warning.
#ibm-stock-decline #ai-threat-to-consulting #legacy-system-modernization #cobol-modernization #technology-transformation
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