Applied Materials (AMAT) shares surged 5.24% in pre-market trading on Thursday, staging a sharp recovery after a multi-day selloff that battered the semiconductor equipment sector. The rally follows a broader rebound in chip-equipment peers, with the Philadelphia Semiconductor Index having fallen over 20% from its June all-time high earlier in the week.

The recovery was driven by bargain hunting after the stock faced a triple headwind of short-selling pressure from renowned investor Michael Burry, who publicly disclosed short positions and projected approximately 30% downside for AI-related chip stocks, alongside concerns over AI capital expenditure returns and fears of competition from Chinese lithography machines. Peer stocks rallied in tandem, with Lam Research surging 7.82% and KLA gaining 2.09% in pre-market, providing sector-wide momentum.

Adding fuel to the rebound, several major Wall Street firms recently raised their price targets on Applied Materials. HSBC, Citi, and UBS lifted their targets to a range of $683 to $705, while the FactSet consensus analyst target stands at $641.61 — implying significant upside from current levels. The company is scheduled to report its fiscal third-quarter results on August 13, with consensus earnings per share expectations of $3.36.