New York, February 26, 2026, 15:56 EST — Regular session
- IBM bounced back in after-hours trading, clawing higher after this week’s steep AI-triggered drop.
- Sentiment steadied after a UBS upgrade and a fresh U.S. defense retail contract.
- Early March brings a chance for new management remarks, with investors eyeing the next earnings date as well.
IBM (IBM.N) climbed 1.7% to $241.68 late in New York, stretching its rebound into a third session. Despite the streak, shares remain down about 18% on the year.
IBM’s rebound is worth watching. Its recent slide has turned into a real-world experiment for the so-called “AI disruption” trade in legacy software and IT services—the bet that more advanced code can shrink jobs that once needed years and whole teams. This debate isn’t limited to a niche; it’s increasingly showing up in how investors price software and services stocks.
IBM’s exposure stands out. Its core mainframe business and consulting arm overlap with modernization efforts now seen as targets for automation—something that spooked investors and triggered a sharp swing in the stock. Portfolio managers had to react quickly, picking their stance.
IBM shares tumbled 13.2% on Monday, notching their sharpest single-day loss since October 2000. The drop came after AI startup Anthropic announced that its Claude Code tool has the capability to modernize COBOL—the decades-old programming language powering IBM’s mainframes in sectors like banking, insurance, and government.
UBS bumped IBM up to “Neutral” from “Sell” just a day later, sticking with its $236 price target and saying the recent dip had brought expectations back to earth. “We upgrade IBM shares to Neutral from Sell as the risk/reward going forward is more balanced in our view,” analysts said. The note pointed to ongoing uncertainty in consulting, with AI shifting client demand, and cited slower growth at Red Hat. Investing
IBM highlighted some recent business wins on Wednesday, announcing it landed a Defense Commissary Agency contract worth up to $112 million over five years. The deal aims to upgrade electronic shelf label systems throughout commissaries around the globe. “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. IBM Newsroom
The company’s push into enterprise AI partnerships continues. On Tuesday, IBM announced plans to add Deepgram’s speech-to-text and text-to-speech tech into its watsonx Orchestrate generative AI workflow platform. “This collaboration aims to help enterprise organizations accelerate their AI initiatives,” said Nick Holda, IBM’s vice president of AI technology partnerships. IBM Newsroom
IBM rolled out its 2026 X‑Force Threat Intelligence Index on Wednesday, reporting a 44% jump in attacks launched through vulnerabilities in public-facing apps. “Attackers aren’t reinventing playbooks, they’re speeding them up with AI,” said Mark Hughes, global managing partner for cybersecurity services at IBM. IBM Newsroom
Things turned sour across the board. U.S. stocks slipped on Thursday—Nvidia’s numbers didn’t do much to revive the tech surge, though traders were picking up names that took a beating earlier this week. “Now the news is over and there’s probably a little bit of profit taking,” said Joseph Sroka, chief investment officer at NovaPoint. Reuters
The risk isn’t going away. According to CIO.com, investors remain concerned that AI coding agents could chip away at the value of IBM’s lucrative mainframe services by making COBOL modernization cheaper. All this while AWS, Microsoft, and Google ramp up their own modernization offerings—and Kyndryl, the IBM spinoff, teams up with those same giants. IBM’s software boss Rob Thomas isn’t buying the argument that translation alone counts as real modernization, writing: “Translation captures almost none of the actual complexity.” CIO
IBM’s next stop is the Morgan Stanley Technology, Media and Telecom Conference set for March 3. After that, the company is penciling in its Q1 earnings release for April 22—still a preliminary date.
