IBM shares tumbled 13% on Monday, marking their largest drop in over 25 years, after concerns about Anthropic's Claude Code tool threatening the company's COBOL-based legacy systems. The selloff has created what Wedbush analysts call a 'great buying opportunity into 2026', with shares now trading at a significant discount.

Analyst Dan Ives maintained an Outperform rating with a $340 price target, arguing the market reaction was an overreaction to competitive risks. He emphasized that IBM's mainframe value proposition extends beyond COBOL, supporting multiple programming environments designed for high performance and security at scale. The modernization challenge, Ives noted, revolves around the platform applications run on, not just coding language.

Ives also highlighted IBM's strategic partnership with Anthropic to embed Claude into its software portfolio with built-in security and governance controls. He believes AI will likely accelerate modernization demand rather than displace IBM's installed base. With the company strengthening its long-term moat through data and hybrid-cloud investments, the analyst sees IBM well-positioned to benefit from rising global AI infrastructure spending despite near-term competitive concerns.