New York, February 26, 2026, 15:56 EST — Regular session
- IBM shares rose again in late trade after a sharp AI-driven selloff earlier this week
- A UBS upgrade and new U.S. defense retail contract helped steady sentiment
- Investors are watching for fresh management commentary in early March and the next earnings date
International Business Machines Corp (IBM.N) shares were up about 1.7% at $241.68 late in the New York session, extending a three-day rebound but still leaving the stock down roughly 18% for the year so far. 1
The bounce matters because IBM’s swoon has become a live test of the “AI disruption” trade in old-line software and IT services — the idea that smarter code tools can compress work that used to take years and big teams. That’s not a small corner of the market anymore; it’s a debate that has been bleeding into valuations across software and services.
For IBM, the sensitivity is obvious. Its mainframes and consulting work sit close to the kind of modernization projects that investors suddenly started treating as vulnerable to automation, and the stock’s violent move forced money managers to pick a side fast.
The slide started on Monday, when IBM shares fell 13.2% — their biggest daily drop since October 2000 — after AI startup Anthropic said its Claude Code tool could be used to modernize COBOL. COBOL is an older programming language still used on IBM mainframes across banking, insurance and government systems. 2
A day later, UBS upgraded IBM to “Neutral” from “Sell” and kept a $236 price target, arguing the pullback had reset expectations. “We upgrade IBM shares to Neutral from Sell as the risk/reward going forward is more balanced in our view,” the brokerage wrote, while flagging uncertainty in consulting as AI reshapes demand and slower growth at Red Hat. 3
IBM also pointed to day-to-day business wins. The company said on Wednesday it secured a Defense Commissary Agency contract with a ceiling value of $112 million for up to five years to modernize electronic shelf label systems across commissaries worldwide. “IBM is proud to continue supporting DeCA’s mission to deliver a modern, efficient shopping experience for military families worldwide,” said Susan Wedge, managing partner for IBM’s U.S. federal market. 4
The company has also been leaning into enterprise AI partnerships. IBM said on Tuesday it will integrate Deepgram’s speech-to-text and text-to-speech into watsonx Orchestrate, its generative AI workflow product. “This collaboration aims to help enterprise organizations accelerate their AI initiatives,” said Nick Holda, IBM’s vice president of AI technology partnerships. 5
On the security side, IBM on Wednesday released its 2026 X‑Force Threat Intelligence Index, saying it observed a 44% increase in attacks that began with exploitation of public-facing applications. “Attackers aren’t reinventing playbooks, they’re speeding them up with AI,” said Mark Hughes, global managing partner for cybersecurity services at IBM. 6
The broader tape was less friendly. U.S. stocks turned lower on Thursday as Nvidia’s results failed to keep the tech rally rolling, even as investors rotated back into shares that had been hit earlier in the week. “Now the news is over and there’s probably a little bit of profit taking,” said Joseph Sroka, chief investment officer at NovaPoint. 7
But the risk case is still on the table. CIO.com reported that investors worry AI coding agents could erode the value of IBM’s high‑margin mainframe services by making COBOL modernization less costly, even as hyperscalers like AWS, Microsoft and Google sell competing modernization tools and IBM spin-off Kyndryl partners with them. IBM software chief Rob Thomas pushed back on the idea that translation equals modernization, writing: “Translation captures almost none of the actual complexity.” 8
Next up: IBM’s investor calendar shows the Morgan Stanley Technology, Media and Telecom Conference on March 3, followed by its first-quarter earnings announcement (preliminary date) on April 22. 9
