IBM (NYSE:IBM) shares rose 4% on Tuesday, partially reversing a steep drop from the prior session after analysts publicly defended the technology giant's mainframe franchise in the wake of Anthropic's announcement about AI-assisted COBOL modernization.
The downturn on Monday was dramatic: IBM stock fell 13% after Anthropic published a blog post describing an AI-enabled approach to modernizing COBOL applications. The disclosure prompted investor concern that IBM's entrenched mainframe workloads might face disruption.
Analysts moved quickly to push back. Amit Daryanani of Evercore ISI, who keeps an Outperform rating and a $345 price target on the shares, argued that customers have long had options to leave mainframes but persist with the platform because of distinctive advantages. Daryanani cited 100% uptime, improved cost efficiency at large scale, the ability to run AI inferencing on-premises, quantum-safe encryption and regulatory requirements in sensitive industries as reasons clients remain committed to mainframes.
Daryanani also pointed to demand signals inside IBM's mainframe cycle. He said the z17 system has shown stronger performance than the z16 cycle through the first three quarters of the program, even as IBM offers modernization tools such as watsonx Code Assistant for Z.
Jefferies' Brent Thill, who maintains a Buy rating with a $370 price target, framed IBM as a company that is proactively transforming its own platform. Thill noted that IBM is integrating generative AI into the mainframe - an effort that includes refactoring COBOL into Java - and that the company’s software momentum depends on a broader set of drivers including hybrid cloud, AI, automation and data, rather than the mainframe alone.
From a valuation and performance perspective, Melius analyst Ben Reitzes observed that the post-selloff price move has left IBM shares roughly 29% below levels reached earlier in the month when the stock peaked at $315. Reitzes highlighted current multiples, noting the stock trades at about 18 times 2026 earnings per share and roughly 16 times this year’s free cash flow.
Operational metrics cited by analysts underscore the scale of IBM's mainframe-related business. System-Z hardware revenue expanded 48% year-over-year in 2025 and accounted for 6% of the company's total revenue. Separately, the firm's Transaction Processing software category generated $8.6 billion, representing 13% of total revenue.
Bottom line - Analyst commentary emphasized that despite recent market jitters tied to Anthropic’s COBOL modernization announcement, IBM’s mainframe ecosystem continues to exhibit financial and technical strengths that analysts say make wholesale displacement unlikely in the near term.