Applied Materials Inc. (AMAT) surged 5.02% in pre-market trading on Tuesday, extending gains from the previous session as the semiconductor equipment maker benefited from a broad sector rally.

The stock's upward movement was primarily driven by Micron Technology's strong quarterly earnings report and optimistic revenue guidance, which sent Micron shares soaring 15.7% and triggered positive sentiment across the chip sector. Applied Materials, which had already gained significantly in the prior session, continued to ride this wave of sector-wide momentum.

Additionally, Jefferies recently raised its global wafer fabrication equipment market forecast, citing AI and high-bandwidth memory (HBM) demand as key drivers for advanced logic and memory capital expenditure. Reflecting this institutional optimism, both Citi and UBS have increased their price target on Applied Materials to $705, highlighting confidence in long-term AI-driven equipment demand.