IBM stock: What’s the AI disruption risk from Claude Code AI?

Investing.com -- IBM faces a reassessment of its artificial intelligence risk after the release of Anthropic’s Claude Code tool triggered its worst trading day in more than 25 years, according to Morgan Stanley.

Analyst Erik Woodring said in a note to clients that the launch “marked IBM’s worst day since 2000,” contributing to a slide of more than 20% over the past month.

He declared that “AI disruption risk has finally entered the IBM debate,” noting that shares had previously been spared the compression that hit software and services valuations earlier in the year.

The firm cut its price target for the stock to $247 from $304, citing extreme volatility across the peer group.

The key question, analysts said, is whether new generative AI tools meaningfully threaten the mainframe.

Morgan Stanley argued it is “important to delineate between access to tools to modernize off the mainframe, and an enterprise’s desire to do so.”

While the Claude Code tool could make COBOL modernization easier, cheaper and faster, the mainframe “serves as the backbone for the world’s largest enterprises,” including banking systems, payments, airline reservations and government platforms.

The bank said the risk is not binary. Smaller enterprises may embrace modernization, and even larger companies could partially migrate.

But Morgan Stanley emphasised the mainframe also brings “reliability, throughput, security, and cost benefits that cannot be replicated elsewhere,” and could even support “massively complex AI workloads.”

Uncertainty, however, is likely to keep volatility high. Morgan Stanley argued that IBM shares may not find a floor until investors see clearer catalysts such as sustained software growth, free cash flow upside or a key quantum breakthrough.

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