IBM ( IBM ) tumbled 15.9% year-to-date after Anthropic’s cloud code tool threatened to automate the modernization of COBOL, IBM’s highest-margin consulting business, while Q4 revenue grew 12% to $19.69B and AI manufacturing bookings hit $12.5B. Franklin Resources ( BEN ) added 849,500 shares and Invesco ( IVZ ) increased its stake by 2.2%, signaling institutional confidence despite the selloff.
Anthropic has directly targeted IBM’s consulting division, which generates nearly a third of revenue and is contracted through Q1 2025, forcing the market to consider whether AI code generation disrupts IBM’s most defensive revenue stream.
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Still one of the biggest names in the computing world, IBM ( NYSE:IBM ) is up more than 16% year-to-date in mid-March, a remarkable turnaround for a stock that closed Q4 earnings at $314.84 on pace. What was the result? Well, on February 23, Anthropic announced that a cloud code tool could automate the work of modernizing COBOL at the heart of IBM’s consulting business, sending shares up nearly 13% in one session. Reddit lit up overnight, and the debate captures exactly where IBM stands: a company with solid foundations trying to convince the market that AI is a fluke, not an existential threat.
Social sentiment turned violent after 23 February. Activity count rose to 59, with 224 comments, flooding r/wallstretbets, r/stocks, and r/stockmarket at the same time. Sentiment fell from 88 (very bullish) to 32 (bullish) over 48 hours, reflecting the community’s split on whether selling was rational or overdone.
IBM Collapses 13% As Market Discovers LLMs Can Write Code – View Original Post: IBM Collapses 13% As Market Discovers LLMs Can Write Code, bought by one/anonymous $190k on r/wallstreetbets.
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IBM tumbles 13% as market discovers LLMs can code, buys at $190k By a/anonymous on Wallstreet Beats
The post linked above captures the market’s immediate reaction to the Anthropic announcement, with the author framing the sale as a direct result of LLMs encroaching on IBM’s core consulting work.
The post received a peak of 3,729 upvotes and 561 comments, with r/wallstreetbets users treating the dip as a buying opportunity. On r/stocks, the head was cold. The headline “IBM’s worst decline in decades” garnered 454 votes and 104 comments, focusing on structural risk.
IBM just had its worst decline in decades In stock by a/unknown
The r/stocks thread above focuses on whether IBM’s consulting segment faces a structural, cyclical, threat from AI code generation tools.
The third thread, “IBM dubs Entropic positions cloud code as ideal tool for code modernization,” received 868 votes and laid out the threat clearly: Entropic is targeting IBM’s most defensive revenue stream.
IBM is touting Entropy’s Cloud Code as an ideal tool for code modernization In stock by a/unknown
The above thread illustrated how the apparent goal of modernizing Entropy’s COBOL—IBM’s highest-margin consulting business—surprised investors who saw the division as unshackled from software chaos.
The bearish case hinges on three concerns:
IBM’s consulting segment accounts for nearly a third of revenue, and was down 2% in Q4, and contracted again in Q1 2025.
CloudCode is a direct modernization of COBOL, the high-level work that IBM has historically owned, without serious software competition.
Total debt increased to $55 billion, a decrease of $1.6 billion, limiting flexibility to respond to competitive changes.
In mid-March, sentiment stabilized to neutral, scoring in the 42 to 58 range, with activity returning to lower levels.
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This infographic details IBM’s current social sentiment score of 42 (Neutral) as of March 13, 2026, and tracks recent volatility impacted by the Anthropic cloud code announcement.
Looking at IBM’s Q4 results, they were very strong, with revenue of $17.6 billion, up 1% year over year, beating estimates by $493 million. Full-year free cash flow reached $12.7 billion, the highest in a decade. In addition, IBM Z mainframes increased 67% in Q4, and the AI book of business productivity reached $5 billion, which CEO Arvind Krishna noted on the earnings call that “general AI now represents a third of consulting bookings,” a figure that shows that IBM is capturing AI requests within the same consulting business, fearing to disrupt the market.
IBM’s Quantum announcement added another layer, unveiling a quantum-centric supercomputing reference architecture with a demonstrated ability to simulate a 303-atom protein. The company says that a fault-tolerant quantum computer will be on the way by 2029. Analysts have an average price target of $318, compared to the current price close to $247.
The acquisition of Confluent, expected to close in mid-2026, will test whether IBM can accelerate its data platform strategy to avoid consulting breaches. Institutional customers remain: Franklin Resources (NYSE:BEN) recently added 849,500 shares, and Invesco (NYSE:IVZ) increased its stake by 2.2%. The stock has a dividend yield of 2.7%, supported by consecutive quarterly payouts since 1916, and an average analyst price target of $318, compared to a current price close to $247.
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