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International Business Machines (IBM) shares suffered a steep daily decline on Feb. 23 after Anthropic said its "Claude Code” could accelerate the modernization of COBOL systems. Since IBM is a major player in the COBOL ecosystem that powers critical insurance, banking, and government infrastructure, investors fear AI could erode its long-standing moat in mission-critical systems.
Amid a broader software rout that some experts are now calling a “SaaS-mageddon,” IBM shares have lost as much as 28% this month.
Evercore ISI Recommends Buying IBM Stock Today
Evercore ISI’s senior analyst Amit Daryanani recommends that long-term investors treat the above-mentioned selloff in IBM stock as a buying opportunity given sustained dominance of the firm’s Z-systems infrastructure.
On Tuesday, Daryanani maintained his “Outperform” rating on the legacy tech name, noting the mainframe remains irreplaceable due to its unmatched 100% uptime and quantum-safe encryption.
Crucially, the z17 hardware cycle is outperforming the previous z16 rollout, proving that mission-critical clients are choosing modernization over migration.
Note that Daryanani currently has a $345 price target on International Business Machines, which signals potential upside of an exciting 50% by year-end.
What Else Makes IBM Shares Attractive to Own
IBM shares are worth owning also because the company’s integration of watsonx for legacy code and local AI inferencing has transformed the mainframe into a modern artificial intelligence (AI) power house.
This hardware-driven stability provides a high-margin buffer and regulatory-compliant foundation that shields International Business Machines from cyclical downturns hurting pure-play software rivals.
What’s also worth mentioning is that IBM’s relative strength index (14-day) now sits in the deeply oversold territory, suggesting it’s reasonable to expect a relief rally in the near term.
A lucrative 2.93% dividend yield makes this legacy tech firm even more attractive to own for the long term.
Wall Street Believes IBM Selloff Has Gone a Bit Too Far
Other Wall Street analysts seem to agree with Daryanani on International Business Machines, also seeing its recent selloff as rather overdone.
According to Barchart, the consensus rating on IBM shares remains at “Moderate Buy,” with the mean target of about $320 indicating potential for a 27% rally from current levels.
