On Monday, the bedrock of the American financial system suffered, as shared of IBM dropped by 11%, ignited by Anthropic’s announcement that Claude has successfully mastered COBOL modernization by automating the arcane programming language that anchors the global banking infrastructure.
IBM shares heightened nearly 13.2% to $223.35, as investors reacted to Anthropic’s Claude Code AI tool that successfully led to Common Business-Oriented Language COBOL modernization – decades old programming language supporting key systems in finance, airlines, and government.
The Google-backed AI startup almost crippled Wall Street and the crypto markets, as its Claude update could set the first stone in definitively ending the “security through obscurity” mandate that has protected decades old mainframe systems.
Basically, Anthropic’s COBOL AI success has opened the doors for a more volatile new era where the very fundamental ledgers of Western capitalism are suddenly up for grabs. And that’s problematic for Wall Street.
AI disruption can now infiltrate US financial infrastructure’s core, forcing a new challenge for centuries old systems built on institutional stability that confront algorithmic unpredictability.
COBOL modernization solutions systems provide decades of predictable performance but at the same time AI introduces a pace and complexity that humans cannot fully predict.
COBOL system automation
“Legacy code modernization stalled for years because understanding legacy code costs more than rewriting it. AI flips that equation,” Anthropic said in its blog post.
Analysts believe the decline is another mounting pressure on tech companies to adapt as AI accelerates COBOL modernization.
AI is turning old computer systems from untouchable assets into easy targets, challenging tech companies. In this case IBM enterprise COBOL by making outdated code simpler, faster, and cheaper to fix or replace.
Mainframe As a Service IBM
COBOL modernization solutions power an estimated 95% of US ATM transactions and remain central to IBM’s mainframe systems that handle large scale transaction processing.
Yet, despite its importance, the knowledge pool is shrinking.
The world’s banking infrastructure still relies heavily on COBOL as a mainframe as a service, with nearly 45% of banking systems running this decades old programming language. COBOL has the power when it comes to the following, core financial processes, including ATM networks, payment systems, and transaction processing.
COBOL has persisted for decades because of its reliability, stability, and seamless compatibility with mainframe systems, making it difficult and costly for institutions to replace. Claude Code automates much of the labor-intensive exploration and analysis of work previously required for COBOL modernization.
For companies struggling with aging systems, AI enabled tools could even pave the way for COBOL-to-Java migration, helping preserve critical financial infrastructure while bridging the generational gap in programming expertise
COBOL AI programming, like Anthropic’s Claude Code, can automatically map dependencies, document workflows, and identify risks, allowing institutions to update these legacy systems faster, cheaper, and more reliable than ever before.
“Modernizing a COBOL system once required armies of consultants spending years mapping workflows,” Anthropic said.
Now, teams can complete modernization in quarters instead of years, cutting costs and accelerating digital transformation, due to COBOL modernization.
Market Ripple Effects
IBM enterprise COBOL drop was part of a broader AI driven market correction on Monday. Software stocks and private equity felt the pressure, while Bitcoin fell 5% to $64,000 and other major cryptocurrencies, including ether (ETH) and solana (SOL), declined similarly.
“It’s becoming increasingly clear how pivotal the times we are in right now truly are,” wrote The Kobeissi Letter, reflecting investor unease.
Bitcoin miners using COBOL AI infrastructure gained ground, with IREN up 5%, Cipher Mining 3.4%, and CleanSpark 1.5%. Meanwhile, precious metals surged gold climbed 3.2% to $5,243 per ounce. Silver jumped 6.5% to $87.69, highlighting a flight to alternative assets amid tech volatility.
Supporting IBM’s long-term valuation, Evercore ISI reiterated an outperform rating with a $345 price target, noting that IBM clients remain attached to mainframes for reliability, speed, regulatory compliance, and on-premises COBOL modernization capabilities, even as best COBOL modernization platforms like watsonx Code Assistant for Z offer faster, automated upgrades.
The firm clearly stated that mainframes are widely used in sensitive sectors, such as government, healthcare, and finance, where migration to public cloud is impractical.
Meanwhile, other tech companies offered contrasting performance. Confluent Inc. posted fourth quarter revenue of $314.8 million, surpassing analyst expectations by 2%, with subscription revenue rising 20% year-over-year (YOY) and Confluent Cloud revenue up 23% YOY.
IBM’s sell-off at this point in time highlights how COBOL AI is recreating and redefining established tech hierarchies, turning what were once protected mainframes into modernization targets while shaking investor confidence.
As COBOL generative AI tools like Claude Code move in system updates, companies must be able to balance digital transformation with operational stability, ensuring innovation does not come at the cost of disruption.
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