Applied Materials Inc. (AMAT) experienced a pre-market plunge of 5.33%, continuing a pattern of declines in the semiconductor equipment sector. The stock's movement reflects broader market pressures affecting chip-related companies during the pre-market session.

The decline is attributed to sustained profit-taking pressure following a sharp rally earlier this month. The stock had surged nearly 9% on July 9 after multiple investment banks raised their target prices, but has been unable to maintain upward momentum as investors take profits.

Broader semiconductor sector weakness is contributing to the pressure, with peers across the chip equipment space also experiencing significant declines. The sector-wide sell-off indicates ongoing investor caution despite positive analyst outlooks for long-term chip equipment demand, highlighting a market dominated by short-term profit-taking behavior after recent gains.