Shares of International Business Machines Corporation (IBM), popularly known as “Big Blue”, witnessed heavy selling pressure on Monday as the stock fell by about 13.2 percent in a single trading session, closing at $223.35. This marks the company’s biggest one-day decline in nearly 25 years.
AI Disruption Fears Hit IBM Mainframe Business
Market analysts said growing concerns surrounding artificial intelligence technology are driving the decline. Investors fear that rapid advancements in AI could disrupt the company’s traditional business model.
Recently, Anthropic AI claimed in its blog that its new AI tool is capable of modernizing legacy COBOL-based software systems at a faster pace. The announcement raised concerns among investors because IBM has long been a major provider of mainframe computing services for banking and financial transaction systems.
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95% US Banking Transactions Rely on COBOL at Risk
Reports suggest that nearly 95 percent of ATM and banking transactions in the United States still rely on COBOL-based infrastructure. The possibility of AI tools upgrading these legacy systems more efficiently has sparked fears that IBM’s mainframe business may face future pressure.
IBM Fall Drags Dow Jones Down 800 Points
The decline in IBM shares also affected the broader U.S. stock market. The Dow Jones Industrial Average dropped by more than 800 points on Monday, with IBM’s weakness being one of the major contributors to the fall.
Tech Sector Volatility from AI Revolution Grows
Analysts believe that the global technology sector is undergoing a major transformation due to the AI revolution, which is rapidly challenging traditional business structures. Several legacy technology companies are trying to reduce dependence on outdated systems, leading to increased investor uncertainty in some segments.
The sell-off also impacted other technology stocks. Shares of cybersecurity firm CrowdStrike Holdings Inc. remained under pressure for the second consecutive day. However, IBM stock showed slight recovery during extended trading sessions.
Biggest IBM Drop Since 2000 Dot-Com Turbulence
Market experts believe that AI technology is increasingly challenging legacy business models across industries, which may lead to higher volatility in technology stocks. Some analysts also say that investors are still unclear about the long-term impact of AI disruption, contributing to continued selling pressure.
The current fall is considered IBM’s biggest single-day weakness since October 2000, when the technology sector also experienced significant market turbulence.
Investors Eye Earnings Amid AI Tech Shifts
Investors are now closely watching upcoming corporate earnings data and developments in AI technology. Experts suggest that volatility may continue in the technology sector as emerging technologies rapidly reshape traditional industrial structures.
About the author – Ayesha Aayat is a law student and contributor covering cybercrime, online frauds, and digital safety concerns. Her writing aims to raise awareness about evolving cyber threats and legal responses.
