IBM (IBM) has lost 15.9% so far this year after Anthropic’s Claude Code tool threatened to automate COBOL modernization, IBM’s highest-margin consulting work, although fourth-quarter revenue grew 12% to $19.69 billion and generative AI bookings surpassed $12.5 billion. Franklin Resources (BEN) added 849,500 shares and Invesco (IVZ) increased its stake by 2.2%, indicating institutional confidence despite the sell-off.
Anthropic took direct aim at IBM’s consulting segment, which generates about a third of revenue and contracted in the first quarter of 2025, forcing the market to consider whether AI code generation disrupts IBM’s most defensible revenue stream.
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He remains one of the biggest names in the world of computing, IBM (NYSE:IBM) has lost more than 16% so far this year through mid-March, a surprising turnaround for a stock that closed fourth-quarter earnings at $314.84 with momentum. What drove this result? Well, on February 23, Anthropic announced that its Claude Code tool could automate the COBOL modernization work at the heart of IBM’s consulting business, sending the stock down nearly 13% in a single session. Reddit lit up overnight, and the debate captures exactly where IBM is: a company with strong fundamentals trying to convince the market that AI is a tailwind, not an existential threat.
Social sentiment changed violently after February 23rd. Activity scores increased to 59, with 224 comments, flooding r/wallstreetbets, r/stocks and r/stockmarket simultaneously. Sentiment went from 88 (very bullish) to 32 (bearish) in 48 hours, reflecting a community split over whether the sell-off was rational or overblown.
IBM plummeted 13% because the market discovered that LLMs can write code; see original post: IBM plummeted 13% as the market discovered LLMs can write code, bought for $190k by u/unknown on r/wallstreetbets.
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IBM plummeted 13% because the market discovered that LLMs can write code and bought $190,000 by u/unknown on wallstreetbets
The post linked above captures the market’s immediate reaction to Anthropic’s announcement, and the author frames the liquidation as a direct consequence of the LLM encroachment on IBM’s core consulting work.
That post garnered 3,729 upvotes and 561 comments at its peak, and r/wallstreetbets users treated the drop as a buying opportunity. On r/stocks, the tone was colder. A thread titled “IBM just suffered its worst downturn in decades” gathered 454 upvotes and 104 comments, focusing on structural risk.
IBM just suffered its worst decline in decades by u/unknown in stock
The previous r/stocks thread focused on whether IBM’s consulting segment faces a structural, not cyclical, threat from AI code generation tools.
A third thread, “IBM Sinks as Anthropic Positions Claude Code as Ideal Tool for Code Modernization,” garnered 868 upvotes and framed the threat clearly: Anthropic is targeting IBM’s most defensible revenue stream.
IBM sinks as Anthropic positions Claude Code as the ideal tool for code modernization by u/unknown in stock
The previous thread highlighted how Anthropic’s explicit goal of modernizing COBOL (IBM’s highest-margin consulting work) shook investors who had seen that segment as insulated from software disruption.
The bearish argument is based on three concerns:
IBM’s consulting segment accounts for about a third of revenue, was down 2% in the fourth quarter and contracted again in the first quarter of 2025.
Claude Code is aimed squarely at modernizing COBOL, a high-margin job that has historically been owned by IBM, without serious software competition.
Total debt rose to $55 billion, a year-on-year drop of $1.6 billion, limiting flexibility to respond to competitive changes.
By mid-March, sentiment stabilized to neutral, with scores in the range of 42 to 58, and activity returned to low levels.
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This infographic details IBM’s current Social Sentiment Score of 42 (Neutral) as of March 13, 2026, and tracks its recent volatility influenced by the Anthropic Claude code announcement.
As for IBM’s fourth-quarter results, they were mostly solid, with revenue reaching $17.6 billion, up 1% year-over-year, beating estimates by $493 million. Full-year free cash flow hit $12.7 billion, the highest in more than a decade. Additionally, the IBM Z mainframe surged 67% in the fourth quarter, and generative AI book of business surpassed $5 billion, which, as CEO Arvind Krishna noted on the earnings call, “generation AI now accounts for more than a third of consulting bookings,” a figure that shows IBM is capturing AI demand within the same consulting business that the market fears is being disrupted.
IBM’s quantum announcement added another layer, revealing a quantum-focused supercomputing reference architecture with a demonstrated ability to simulate a 303-atom protein. The company says it remains on track to achieve a fault-tolerant quantum computer by 2029. Analysts maintain an average price target of $318, compared with a current price near $247.
The Confluent acquisition, expected to close in mid-2026, will test whether IBM can accelerate its data platform strategy quickly enough to offset consulting headwinds. Institutional buyers continue to be: Franklin Resources (NYSE:BEN) added 849,500 shares recently and Invesco (NYSE:IVZ) increased its stake by 2.2%. The stock has a 2.7% dividend yield, backed by consecutive quarterly payments since 1916, and an average analyst price target of $318, compared to a current price near $247.
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