From crash to comeback: IBM rebounds 5% as analysts call AI-driven sell-off an overreaction

IBM shares climbed about 5.2% by 10:50 a.m. ET on Tuesday, bouncing back after a heavy fall on Monday. The drop happened after Anthropic said its Claude Code tool can help modernise old COBOL systems, which made investors worry that AI could hurt IBM’s mainframe business.

But analysts say those fears are likely overdone. Companies have had many years to move away from mainframes, but still they use them as they are extremely reliable to handle huge volumes of transactions and rarely fail. For banks and large businesses, that kind of stability is hard to replace.