IBM's $40B stock wipeout is built on a misconception: Translating COBOL isn't the same as modernizing it

On Tuesday, Anthropic published tools that let Claude read, analyze and translate legacy COBOL into modern languages like Java and Python. By the end of the trading day, investors had wiped roughly $40 billion from IBM's market cap — the company's biggest single-day drop in 25 years — pricing the announcement as an existential threat to IBM's mainframe business.The reaction was swift. It was also built on a fundamental misreading of why enterprises run mainframes in the first place.IBM's COBOL is 66 years old. It was designed in 1959, runs on IBM mainframes, and continues to power transaction processing systems with an estimated 250 billion lines of COBOL in active production, according to the Open Mainframe Project.The engineers who wrote it are retiring; the ones replacing them largely c