Applied Materials (AMAT) shares plummeted 5.03% during intraday trading on Monday, reversing earlier pre-market gains. The sharp decline came amid a broad-based selloff in the semiconductor equipment sector, dragging the stock significantly lower.

The downturn follows reports that Michael Burry, the investor known for predicting the 2008 financial crisis, has increased his bearish bets against the AI and semiconductor sectors. Burry disclosed expanded short positions in Nvidia, Micron Technology, and the iShares Semiconductor ETF, while also initiating a short position in Applied Materials. He predicts a roughly 30% correction for AI-related chip stocks, arguing that investment pace has outpaced real demand growth and that future revenues rely heavily on off-balance-sheet financing.

The broader semiconductor equipment sector also faced pressure, with peers such as Amkor Technology, ASML, Teradyne, Lam Research, and KLA-Tencor all declining. The selloff overshadowed earlier positive analyst actions, including HSBC raising its price target on Applied Materials to $683 and maintaining a Buy rating.