TLDR
- IBM stock has lost 28.6% in under a month, sliding from $312.95 to $223.35
- A single Anthropic blog post about COBOL AI triggered a 13% one-day drop — IBM’s worst since 2000
- Jefferies kept its Buy rating and $370 price target, seeing 66% upside from current levels
- IBM’s watsonx Code Assistant for Z has been converting COBOL to Java since Q4 2023
- IBM named Deepgram its first voice AI partner, integrating speech tech into watsonx Orchestrate
IBM stock has taken a beating. In less than a month, it has fallen 28.6% — from $312.95 on February 2 to $223.35 — putting it close to its 52-week low.
The damage accelerated fast. On one day alone, the stock dropped 13%, marking its worst single-day performance since the dot-com collapse in 2000.
International Business Machines Corporation, IBM
The trigger was a blog post from Anthropic. The AI company flagged COBOL functionality in its Claude Code platform, noting that hundreds of billions of COBOL lines still run daily across finance, airlines, and government systems.
Investors took that as a threat to IBM. COBOL underpins critical infrastructure like payment processing — territory where IBM has long been a key player. The concern: AI tools could chip away at demand for IBM’s legacy services.
A broader rotation out of legacy tech stocks added more pressure, as capital moved toward quantum computing names and high-yield bonds.
Jefferies Calls It a Buying Opportunity
Jefferies analyst Brent Thill didn’t join the panic. He argued IBM is “already disrupting itself” and maintained his Buy rating with a $370 price target — implying around 66% upside from current levels.
His case centers on IBM’s watsonx Code Assistant for Z, live since Q4 2023. It uses generative AI to convert COBOL into Java, read production code, and modernize legacy applications — all within the mainframe environment.
Thill’s view is that this gives IBM an edge that general-purpose AI coding tools can’t easily replicate, since they lack native access to mainframe data and context.
He also pointed out that IBM is partnering with Anthropic and OpenAI — meaning the perceived threats are also collaborators feeding into IBM’s hybrid cloud and enterprise AI stack.
Thill called the selloff a “near-term sentiment overhang” rather than a structural problem. Eleven other analysts agree with the Buy call. Five have a Hold and one has a Sell, landing IBM at a Moderate Buy consensus. The average price target is $337.53, pointing to roughly 51% upside.
IBM Adds Deepgram as First Voice AI Partner
IBM also announced a deal with Deepgram on the same day, making it IBM’s first voice AI partner. Deepgram’s speech-to-text and text-to-speech technology will be built into watsonx Orchestrate.
The integration lets users interact with AI agents through natural speech and supports multiple languages including Arabic and Indian dialect variants. Target use cases include customer care, call analysis, and voice-driven data entry in healthcare and finance.
IBM’s P/E currently sits at 20.3. One analysis flags the stock as undervalued relative to its fair value. Historically, the only comparable dip of this scale since 2010 led to a 42% peak recovery within 12 months.
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