Applied Materials Inc. (AMAT) stock plummeted 7.72% during intraday trading on Friday, as the semiconductor equipment maker was caught in a broad market selloff affecting technology and chip stocks.

The sharp decline reflects growing investor concerns over the sustainability of artificial intelligence-related spending, leading to a reassessment of this year's AI-fueled rally. Traders are engaging in profit-taking following a significant rally earlier this month, during which the stock surged nearly 9% after multiple investment banks raised their target prices.

The selloff is part of a sector-wide rout, with the Philadelphia SE Semiconductor index hitting a nearly two-month low and on pace for its worst weekly performance in over 15 months. Other chip-making equipment companies and major semiconductor names also experienced significant declines amid the broader market pressure on technology stocks.