As IBM Stock Rebounds From Historic Selloff, Analysts Downplay Anthropic AI Threat: Retail Bulls Pile In

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UBS upgrades the stock while Evercore and Jefferies argue Claude’s COBOL tool is no threat to IBM’s mainframe moat.

  • UBS upgraded its rating on IBM stock to ‘neutral’ from ‘sell.’
  • Analysts said the threat to IBM’s COBOL modernization business from the new Anthropic tool is overblown.
  • Stocktwits sentiment for IBM has remained ‘extremely bullish’ since Monday’s selloff. 

International Business Machines Corp. shares rose 2.7% on Tuesday and gained another 0.7% in after-hours trading, rebounding from a sharp selloff the previous day triggered by competition concerns tied to a new AI tool from Anthropic.

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In a string of encouraging signals, UBS upgraded its rating on IBM stock to ‘neutral’ from ‘sell’ on Tuesday, according to The Fly. Analysts, including Evercore and Jefferies, said the new Claude feature, aimed at modernizing legacy code on IBM systems, is not as significant a threat as the market fears and would, at best, complement IBM’s own business of updating COBOL codebases.

The release of that tool triggered a 13.2% drop in IBM stock on Monday, its steepest single-day decline in over 25 years.

“The idea of shifting off of [the] mainframe is not a new concept,” Evercore analysts said in a note, reported by MarketWatch. “IBM’s customers have had ample opportunities to migrate off of mainframe and are sticking with the platform given inherent advantages.”

IBM argued that updating COBOL is a hard problem and its own tools deliver the best results. “New AI tools emerge every week, including our own,” IBM said in a response to Yahoo Finance. “What they do not change is the fundamental engineering challenge of running mission-critical workloads at scale.”

Retail’s View On IBM

On Stocktwits, retail sentiment for IBM remained ‘extremely bullish’ as of late Tuesday, unchanged from the previous day. Message volume around the ticker was ‘extremely high, with members agreeing that Monday’s selloff was overdone and that Claude is unlikely to outperform IBM’s own tools used for COBOL modernization.

IBM sentiment and message volume as of February 24 | Source: Stocktwits

“Anthropic’s standalone tool is great for small less-regulated shops, but the big banks, insurers, governments, and enterprises that run 70-95% of COBOL workloads still will route through IBMs platform for the risk controls and integration that Anthropic alone can’t provide,” posted one user, who expects IBM’s stock to rally 80% by the year end.

IBM stock should be back to $300 in a couple of weeks, according to another user.

Shares of IBM closed at $229.32 on Tuesday and are down 22.6% year to date. The stock is now trading at a forward price-to-earnings ratio of 18.5x, lower than Microsoft Corp.’s 22.2x and Oracle’s 20.3x.

For updates and corrections, email newsroom[at]stocktwits[dot]com.<

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