Applied Materials Inc. (AMAT) experienced a significant intraday plummet of 5.23% on Monday, as the semiconductor equipment sector faced broad selling pressure.

The sharp decline is attributed to multiple factors converging. Firstly, investors engaged in profit-taking after the stock surged nearly 9% in a single session earlier in the week, a rally driven by major banks including Goldman Sachs and Morgan Stanley raising their price targets and positive long-term demand commentary from the company's CEO. Secondly, noted short-seller Michael Burry's public bearish bets on semiconductor stocks continued to weigh on market sentiment, adding to the selling pressure.

Furthermore, fresh geopolitical tensions, specifically renewed U.S.-Iran conflict leading to the reported closure of the Strait of Hormuz, dampened overall risk appetite and pressured chip stocks broadly. Underlying concerns about the sustainability of the AI chip demand boom that has fueled the sector's recent gains also contributed to the sell-off. The weakness was not isolated, with peers in the semiconductor equipment and broader chipmaking space also trading lower.