Explained: How IBM’s 13% drop on Anthropic’s COBOL disruption scare led to a bloodbath in TCS, Infosys, Wipro and other IT stocks

Shares of major information technology companies came under pressure on February 24, falling as much as 8%, following a sharp decline in IBM among restive investors on Wall Street. The stock fell 13%, its worst single-day drop in 25 years, after AI startup Anthropic said its Claude tool can help streamline COBOL code.COBOL, short for Common Business-Oriented Language, is widely used in corporate data processing and continues to power critical banking, government and airline systems on IBM mainframes. The development raised concerns about a possible disruption to IBM’s key revenue streams, sending the stock to its worst one-day decline since October 2000.

Sentiment shifted to Indian IT stocks. Coforge, Persistent Systems and HCLTech led the losses with declines of around 7-8%. Shares of Infosys, Tech Mahindra, Mphasis and Tata Consultancy Services fell around 4-6%. The Nifty IT index fell as much as 6% on Tuesday.COBOL remains an important technology for many Indian IT companies, especially those supporting global banking, insurance and retail infrastructure. TCS is one of the largest employers for mainframe and COBOL-related roles in India, largely for international banking clients. Infosys also hires mainframe developers and systems programmers for COBOL-based systems, while Wipro uses the language in various consulting and IT services engagements. Coforge similarly focuses on COBOL in parts of its specialized services portfolio.

In a blog post on Monday, Anthropic said that modernizing COBOL systems traditionally required large teams of consultants who spent years mapping workflows. “Tools like Claude Code can automate the exploration and analysis phases that require the majority of effort in COBOL modernization,” the company said, adding that with AI, teams can modernize COBOL codebases in quarters instead of years.

Anthropic claimed that AI excels at streamlining tasks that once made COBOL modernization prohibitively expensive. “It allows your team to focus on strategy, risk assessment and business logic, while AI automates code analysis and deployment,” the company said.

The company claimed that the AI ​​approach can work for COBOL systems of all sizes. “Tools like Claude Code can automate much of the exploration and analysis work described, giving your team the comprehensive insight they need to plan and execute migrations with confidence,” the report said. Furthermore, new concerns have also emerged about AI’s potential to reshape the cybersecurity industry. Tuesday’s sharp decline in cybersecurity stocks reflected these fears, as investors assessed the potential impact of a new security tool launched by Anthropic.

During today’s session, several cybersecurity and technology stocks came under sharp selling pressure, with some falling as much as 20%. TAC Infosec was among the worst hit, hitting a 20% lower circuit at Rs 415.70 on the NSE. TechD Cybersecurity fell by more than 14%, while Sattrix Information Security fell by 5%. Exato Technologies fell 3%. Among other stocks, Sasken Technologies fell up to 3.2% to the day’s low of Rs 1,155 per share on the BSE Limited. Quick Heal Technologies fell over 3%, while Expleo Solutions fell almost 5% to an intraday low of Rs 791 per share.

IBM Shares Fall 13%, Recordest Drop in 25 Years After Anthropic Says AI Can Modernize COBOL

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