Shares of Applied Materials (AMAT) tumbled 5.65% during intraday trading on Tuesday, extending a sharp downturn for the semiconductor equipment maker amid a broader sell-off in AI-related chip stocks.

The decline was fueled by sustained pressure from famed investor Michael Burry's publicly disclosed short position against Applied Materials and the semiconductor sector. Burry, known as "The Big Short," has been actively increasing bearish bets, projecting an approximately 30% correction across AI-related chip names. This bearish sentiment has continued to weigh on the stock, overriding recent bullish analyst calls from HSBC, Citi, and UBS, which have set price targets as high as $705.

Broader market concerns also contributed to the sell-off, as investors grew increasingly cautious about corporate spending on AI infrastructure and rising competition from Chinese chipmakers. The nervousness was amplified ahead of pivotal earnings reports from tech giants including Amazon, Meta, Apple, and Microsoft, with markets questioning whether massive AI investments are yielding adequate returns.