New York, Feb 24, 2026, 17:25 ET — After-hours
- IBM stock bounced back 2.7% Tuesday, recovering some ground after sinking 13% the previous day on renewed concerns around AI disruption.
- Anthropic’s push for its “Claude Code” as a way to accelerate COBOL upgrades on IBM-connected systems triggered the selloff.
- IBM said Tuesday it’s teaming up with Deepgram, bringing voice AI capabilities to its watsonx Orchestrate product.
IBM shares ended Tuesday up 2.67% at $229.32, barely budging in after-hours trading at $229.20. That follows Monday’s 13.15% plunge—its steepest single-day loss in over 20 years. (MarketScreener)
The shift is significant: IBM’s central role ties it to a legacy of aging code and the lucrative, often drawn-out upgrades that come with it. But if AI can compress those overhaul timelines, pulling multi-year jobs down to just a few quarters, investor expectations around future cash flows could change fast.
Timing plays a big part here for traders. AI news is coming out in sharp, rapid flurries. The market’s treating the supposed moat protecting “legacy” systems as if it could shrink fast, despite how tough those platforms actually are to swap out.
Monday’s selloff kicked off after AI startup Anthropic published a blog post claiming its Claude Code tool can revamp COBOL, the decades-old language that still powers IBM mainframes across sectors from finance to government. According to Reuters, IBM shares logged their sharpest single-day decline since October 18, 2000. (Reuters)
Anthropic didn’t mince words in its post: “With AI, teams can modernize their COBOL codebase in quarters instead of years.” The company pointed out that most of the expense has traditionally come from the initial “exploration and analysis” phase, thanks to layers of business logic built up over decades. (Claude)
By Tuesday, unwinding hit sections of software. IBM managed gains, and the S&P 500 software & services index also climbed. Anthropic’s announcement of new “plug-ins” in collaboration with partners drove the move, according to Reuters. “Software stocks and the IGV particularly are just massively oversold,” said Dennis Dick, chief market strategist at Stock Trader Network. (Reuters)
IBM, for its part, kept attention on its AI strategy, announcing plans to bring Deepgram’s speech-to-text and text-to-speech tools into watsonx Orchestrate. It’s Deepgram’s first time teaming up as a voice partner, according to the release. “Voice is rapidly becoming the default interface between humans and technology,” said Deepgram CEO Scott Stephenson. IBM’s Nick Holda described the partnership as an effort to “help enterprise organizations accelerate their AI initiatives.” (IBM Newsroom)
But the core question lingers. Should AI tools actually drive down the cost and speed up legacy-code rewrites, major clients might opt to handle more of the work themselves—or shift workloads ahead of schedule. That could put pressure on the pricing umbrella for modernization projects.
The other risk? Just ongoing noise. “AI disruption” headlines have been sparking reflex selling, traders jumping first, questions coming after. Concrete proof — things like customer adoption, real cost reductions, or contract wins — isn’t coming overnight.
IBM has penciled in April 22 for its first-quarter earnings release, giving investors a date to circle. Following the week’s selloff, plenty of focus will land on what the company says about modernization project demand—that’s likely to be the hot line in the release. (IBM)
Next up: Nvidia reports quarterly earnings on Wednesday, a moment investors are eyeing as a key gauge of just how resilient AI spending remains. Some are treating this as the market’s big AI litmus test. (Reuters)
