International Business Machines Corp (NYSE:IBM) shares are rebounding Tuesday morning after plunging more than 13% Monday, when fears about artificial-intelligence disruption hammered the legacy tech giant. Here’s what investors need to know.
- IBM stock is surging to new heights today. Why are IBM shares rallying?
Anthropic Targets COBOL Legacy Systems
The sell-off followed a blog post from Anthropic touting its Claude Code AI assistant as a way to modernize massive codebases written in COBOL, the decades-old programming language that still powers much of global banking and government infrastructure.
Anthropic said Claude Code can map dependencies, document workflows and flag risks across sprawling legacy systems, tasks that typically require months of high-margin consulting work.
AI Threatens IBM Mainframe Revenue
IBM has long earned steady revenue from mainframes and services that maintain and upgrade COBOL-heavy environments. If generative AI tools can automate large chunks of that work, investors worry that a key profit pool could shrink or that rivals could use AI to undercut IBM on modernization projects.
Monday and Tuesday’s volatility highlight the risk facing incumbents built on servicing legacy technology. For IBM, the question is whether its own AI and hybrid-cloud tools can ultimately win those modernization budgets instead of AI-native rivals.
IBM Shares Signal Weakness
The stock is currently trading 16.7% below its 200-day simple moving average (SMA) and 21% below its 100-day SMA, indicating a bearish trend in the longer term.
Over the past 12 months, shares have decreased by 10.79% and are positioned closer to their 52-week lows than highs.
The RSI is at 22.52, indicating that the stock is in oversold territory, which could suggest a potential rebound if buying interest returns. Meanwhile, the MACD shows a value of -14.3982, below its signal line at -9.0380, indicating bearish momentum.
The combination of oversold RSI and bearish MACD suggests mixed momentum, indicating that while the stock is oversold, the current trend remains negative.
- Key Resistance: $260.50
- Key Support: $233.50
Analysts Mixed Despite Buy Consensus
Analyst Consensus & Recent Actions: The stock carries a Buy Rating with an average price target of $319.71. Recent analyst moves include:
- Jefferies: Buy (Raises Target to $370.00) (Jan. 29)
- UBS: Sell (Raises Target to $236.00) (Jan. 29)
- JP Morgan: Neutral (Raises Target to $317.00) (Jan. 29)
Benzinga Edge Rankings
Benzinga Edge gives IBM a strong 88.19 Quality score, even as its Momentum score stands at 16.81, highlighting the stock’s mixed technical and fundamental profile.
IBM Shares Rebound Tuesday
IBM Price Action: IBM shares were up 3.63% at $231.63 at the time of publication on Tuesday, according to Benzinga Pro data.
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