IBM's stock bounces. Analysts say the company won't be so easily dismantled by AI.

By Emily Bary

On the heels of IBM's sharpest daily decline in a quarter-century, analysts cheered the resilience of the company's mainframe business

IBM "is already disrupting itself," one analyst noted.

Analysts have rushed to the defense of International Business Machines after the stock suffered its worst one-day drop in more than a quarter-century.

The negative catalyst was a blog post from Anthropic, which highlighted a new Claude Code feature that automates the modernization of common business-oriented language, a programming language used for data processing. IBM shares (IBM) fell 13.2% on Monday as investors worried that the tool would eat into IBM's infrastructure and consulting businesses that are focused on COBOL and incentivize customers to conduct more business workloads away from mainframes.

See also: IBM's stock heads for worst month in 34 years - and Anthropic is partly to blame

But Evercore ISI analyst Amit Daryanani wrote that Monday's drop was "unwarranted." IBM's stock gained 2.7% on Tuesday.

"The idea of shifting off of mainframe is not a new concept," he said in a note to clients. "IBM's customers have had ample opportunities to migrate off of mainframe and are sticking with the platform given inherent advantages."

He noted that IBM itself has offered modernization tools, including its own coding assistants. But IBM's z17 mainframe has still proved popular, Daryanani added, with customers seemingly gravitating toward benefits like 100% uptime, quality encryption and cost efficiencies.

Jefferies analyst Brent Thill suggested that Monday's heavy pressure on IBM shares reflected an oversimplified view of IBM's business.

"Modernization on mainframe is rarely just code translation and documentation; it requires deep integration with operational resilience, performance tuning, and change management, areas where IBM already sits at the center," Thill wrote in a note to clients.

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He views the mainframe business as "resilient" given examples from IBM of how customers are growing, not shrinking, their workloads. Mainframes are "deeply entrenched" across industries, he added.

And Thill echoed that Anthropic isn't the first to think about modernization opportunities. IBM "is already disrupting itself by productizing AI-native modernization tools that directly address the core challenges in its install base, including a shrinking COBOL talent pool and the need to reverse-engineer decades of business logic," he wrote.

-Emily Bary

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02-24-26 1710ET