IBM shares slide 13% as investors react to a new AI tool aimed at modernizing COBOL systems

International Business Machines (IBM) is down 13.1% today. Here is some analysis on what might have caused this price movement.

Analysis: IBM appears to be selling off after a new AI-based “legacy code modernization” tool was unveiled that targets COBOL workflows, an area closely tied to IBM’s long-running mainframe and services ecosystem. The market reaction suggests investors are reassessing how quickly AI could reduce the cost and need for traditional, consultant-heavy modernization work, pressuring sentiment around legacy IT vendors.

Details:

An AI developer published a February 23, 2026 post describing how its tooling can automate key steps in COBOL modernization, including mapping dependencies, documenting workflows, and surfacing risks faster than human-led reviews.

The same post emphasized COBOL’s continued scale in critical systems (including an estimate that COBOL supports most U.S. ATM transactions), reinforcing why automation in this niche could matter commercially.

IBM has historically been closely associated with enterprise mainframe environments where COBOL is common, so a credible “cheaper/faster modernization” narrative can be interpreted as a competitive threat to parts of IBM’s services and tooling opportunity set.

Broader market weakness also likely amplified the move, with IBM cited as a meaningful drag on the price-weighted Dow during the session.

Sources:

Business Insider, Anthropic, Forbes

Disclaimer: This price movement analysis was generated with the help of AI. Please double-check the information provided for mistakes.

$IBM Insider Trading Activity

$IBM insiders have traded $IBM stock on the open market 1 times in the past 6 months. Of those trades, 1 have been purchases and 0 have been sales.

Here’s a breakdown of recent trading of $IBM stock by insiders over the last 6 months:

DAVID N FARR purchased 1,000 shares for an estimated $304,000

To track insider transactions, check out Quiver Quantitative's insider trading dashboard.

$IBM Hedge Fund Activity

We have seen 1,668 institutional investors add shares of $IBM stock to their portfolio, and 1,528 decrease their positions in their most recent quarter.

Here are some of the largest recent moves:

UBS AM, A DISTINCT BUSINESS UNIT OF UBS ASSET MANAGEMENT AMERICAS LLC removed 19,784,058 shares (-73.1%) from their portfolio in Q4 2025, for an estimated $5,860,235,820
CAPITAL WORLD INVESTORS added 4,976,756 shares (+29.2%) to their portfolio in Q4 2025, for an estimated $1,474,164,894
GQG PARTNERS LLC removed 4,692,192 shares (-100.0%) from their portfolio in Q3 2025, for an estimated $1,323,948,894
PRICE T ROWE ASSOCIATES INC /MD/ added 2,553,552 shares (+83.4%) to their portfolio in Q4 2025, for an estimated $756,387,637
PITCAIRN CO removed 1,674,105 shares (-99.8%) from their portfolio in Q3 2025, for an estimated $472,365,466
JPMORGAN CHASE & CO removed 1,548,522 shares (-9.2%) from their portfolio in Q4 2025, for an estimated $458,687,701
CORIENT PRIVATE WEALTH LLC added 1,484,026 shares (+359.6%) to their portfolio in Q4 2025, for an estimated $439,583,341

To track hedge funds' stock portfolios, check out Quiver Quantitative's institutional holdings dashboard.

$IBM Government Contracts

We have seen $1,155,300,285 of award payments to $IBM over the last year.

Here are some of the awards which we have have seen pay out the most over the last year:

BENEFITS TRANSFORMATION PLATFORM: $132,052,045
NAVY ENTERPRISE RESOURCE PLANNING (ERP) TECHNICAL SUPPORT SERVICES (NETSS).: $124,828,089
ORDER FOR Z17 CLINS OFF THE IBM CONTRACT: $77,398,572
SUSTAINMENT, ENHANCEMENT AND TRANSITION SUPPORT OF VAS ENTERPRISE CORE HR SOLUTION - HRSMART. THE CONTRACT...: $74,437,373
CDS BRIDGE CONTRACT POP 09/08/2023 - 09/07/2025: $63,780,665

To track government contracts to publicy traded companies, check out Quiver Quantitative's government contracts dashboard.

$IBM Congressional Stock Trading

Members of Congress have traded $IBM stock 9 times in the past 6 months. Of those trades, 6 have been purchases and 3 have been sales.

Here’s a breakdown of recent trading of $IBM stock by members of Congress over the last 6 months:

REPRESENTATIVE DAVID TAYLOR has traded it 2 times. They made 2 purchases worth up to $65,000 on 01/08 and 0 sales.
REPRESENTATIVE GILBERT RAY CISNEROS, JR. has traded it 2 times. They made 2 purchases worth up to $30,000 on 12/19, 11/12 and 0 sales.
REPRESENTATIVE JULIE JOHNSON has traded it 2 times. They made 0 purchases and 2 sales worth up to $30,000 on 12/18, 11/13.
REPRESENTATIVE LLOYD DOGGETT purchased up to $15,000 on 12/12.
SENATOR SHELLEY MOORE CAPITO sold up to $50,000 on 10/29.
REPRESENTATIVE JULIA LETLOW purchased up to $15,000 on 10/22.

To track congressional stock trading, check out Quiver Quantitative's congressional trading dashboard.

$IBM Analyst Ratings

Wall Street analysts have issued reports on $IBM in the last several months. We have seen 6 firms issue buy ratings on the stock, and 1 firms issue sell ratings.

Here are some recent analyst ratings:

Jefferies issued a "Buy" rating on 01/29/2026
UBS issued a "Sell" rating on 01/29/2026
Evercore ISI Group issued a "Outperform" rating on 01/20/2026
RBC Capital issued a "Outperform" rating on 01/05/2026
Stifel issued a "Buy" rating on 12/09/2025
Oppenheimer issued a "Outperform" rating on 11/21/2025
B of A Securities issued a "Buy" rating on 10/23/2025

To track analyst ratings and price targets for $IBM, check out Quiver Quantitative's $IBM forecast page.

$IBM Price Targets

Multiple analysts have issued price targets for $IBM recently. We have seen 12 analysts offer price targets for $IBM in the last 6 months, with a median target of $337.5.

Here are some recent targets:

Dan Ives from Wedbush set a target price of $340.0 on 01/29/2026
David Grossman from Stifel set a target price of $340.0 on 01/29/2026
Matthew Swanson from RBC Capital set a target price of $361.0 on 01/29/2026
Brent Thill from Jefferies set a target price of $370.0 on 01/29/2026
David Vogt from UBS set a target price of $236.0 on 01/29/2026
Brian Essex from JP Morgan set a target price of $317.0 on 01/29/2026
Amit Daryanani from Evercore ISI Group set a target price of $345.0 on 01/29/2026

This article is not financial advice. See Quiver Quantitative's disclaimers for more information. Note that there may be inaccuracies due to mistakes in ticker-mapping, and other anomalies.