IBM Plummets 27% in 6 Months: Should You Reassess the Stock?

International Business Machines Corporation IBM has declined 27% over the past six months against the industry’s growth of 60.7% due to macroeconomic challenges and a sudden development in the artificial intelligence (AI) domain that threatens its core legacy businesses. The stock has lagged peers like Microsoft Corporation MSFT and Amazon.com, Inc. AMZN. While Microsoft has declined 18.2%, Amazon has rallied 10.7% over this period.

Six-Month IBM Stock Price Performance

Image Source: Zacks Investment Research

What Triggered IBM’s Fall From Grace?

IBM’s downslide was primarily triggered by an announcement from AI firm Anthropic that its Claude Code tool can modernize legacy COBOL systems — a foundational programming language deeply embedded in IBM’s mainframe ecosystem. With Claude Code proposing to substantially automate code exploration, documentation, refactoring and security analysis, it threatened to reduce…