IBM Rebounds 3.7% After 13.2% Plunge as UBS Sets $236 Target
IBM shares plunged 13.2% on Feb. 23 after Anthropic introduced Claude Code for COBOL modernization despite Q4 2025 EPS beat, 12% revenue growth and $14.7B cash flow. UBS upgraded to neutral with a $236 target and shares rebounded 3.7% as Jim Cramer warned lower-cost AI rivals could pause IBM renewals.
1. Plunge Triggered by Anthropic Launch
On February 23, IBM shares fell 13.2% after Anthropic unveiled Claude Code features for COBOL modernization, sparking fears that customers would delay or reduce IBM mainframe and software spending in favor of lower-cost AI solutions.
2. Earnings Beat and UBS Upgrade
Despite the sell-off, IBM reported a Q4 2025 EPS beat, 12% year-over-year revenue growth and $14.7 billion in cash flow. In response, UBS upgraded its rating to neutral and set a $236 price target, fueling a 3.7% stock rebound.
3. Cramer Warns on AI Competition
Jim Cramer highlighted the “astonishing decline” for a fundamentally strong company, warning that successful AI competitors could undercut IBM’s hardware-software bundles and prompt clients to seek shorter, lower-value contracts.