The shares of International Business Machines CorporationInternational Business Machines Corporation (IBM) plunged 13.2% on Monday, February 23, which was their steepest single-day drop since October 18, 2000.
It came after AI startup Anthropic announced Claude Code, a tool that can modernize legacy programming languages running on IBM mainframe systems, threatening the tech giant’s core remaining business.
Data monitored on Nasdaq and reported by Bloomberg showed IBM’s full February performance at approximately -30%, among the worst months in the company’s 55-year chart history.
The massive drop in value is similar to the dot-com crash era of 2000-2002, when multiple months saw similar devastation.
TL;DR
- IBM shares fell 13.2% on February 23, 2026, marking the largest single-day decline in more than 25 years.
- The company’s stock lost roughly 30% over the full month of February 2026.
- February’s performance is the most severe monthly drop IBM has experienced in decades.
The fact that investors are reacting so strongly to an AI-driven threat, rather than broader economic conditions, illustrates how disruptive tools like Anthropic’s Claude Code are perceived to be for legacy technology leaders like IBM.
What Claude Code Does (And Why It Terrifies IBM)
The core of IBM’s sudden market tumble lies in the capabilities of Anthropic’s Claude Code.
Designed to modernize legacy programming languages such as COBOL, the tool can run directly on IBM mainframe systems, automating workflows that once required months of labor-intensive consulting.
For companies reliant on these systems, Claude Code offers a faster, cheaper alternative for maintaining and upgrading critical infrastructure.
IBM’s mainframe systems remain a cornerstone of its business, powering the legacy software of Fortune 500 companies across banking, insurance, and government sectors.
Historically, these clients have depended on IBM for specialized support, ensuring ongoing revenue from maintenance and upgrades.
Claude Code, however, threatens to break that dependency by enabling companies to modernize their codebases without IBM’s extensive consulting services.
By effectively reducing the need for IBM’s expertise in legacy systems, Claude Code poses a direct threat to the tech giant’s core remaining business.
Analysts warn that if adoption accelerates, IBM could face a structural decline in one of its last reliable revenue streams, explaining why investors reacted so sharply to the announcement.
The October 2000 Comparison
IBM’s dramatic drop on Monday harks back 26 years to October 18, 2000, during the early stages of the dot-com crash.
At the time, tech stocks were tumbling across the board, and IBM experienced multiple monthly losses ranging from 20% to 30%, similar to what the company has just endured this February.
Despite those severe declines, IBM ultimately weathered the dot-com storm.
The company used the crisis as a turning point, transforming its business by shifting focus from hardware and legacy software toward services, cloud computing, and enterprise solutions.
Investors who stayed the course eventually saw the benefits of IBM’s strategic pivot, illustrating the company’s resilience in the face of technological disruption.
Today, however, the challenge is different. AI-driven tools like Anthropic’s Claude Code threaten the core of IBM’s remaining legacy business rather than its peripheral operations.
While history suggests IBM has the capacity to adapt, the question now is whether it can survive -and thrive – through an AI transformation that could fundamentally reshape its most entrenched revenue streams.
ELI5
IBM makes old computer systems that lots of big companies still use. Normally, updating these systems takes a lot of time and money.
Now, a new AI tool called Claude Code can do the same work much faster. This scares investors because if companies use Claude Code instead of IBM, the tech giant could lose a huge part of its business—so its stock price dropped a lot really quickly.
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