Applied Materials Inc. (AMAT) shares plummeted 8.87% during Tuesday's intraday trading session, marking a significant decline for the semiconductor equipment giant.

The sharp drop was driven by a confluence of negative factors. Renowned short seller Michael Burry publicly disclosed a short position against the company, arguing that AI semiconductor valuations have reached historically extreme levels. Concurrently, significant insider selling added pressure, as CEO Gary Dickerson sold a cumulative 78,321 shares in late June, cashing out over $54 million.

The selling pressure was compounded by broad weakness across the semiconductor equipment sector and a global pullback in AI-related stocks. This sector-wide bearish sentiment followed quarterly results from Samsung Electronics, which failed to reassure investors despite showing strong profit growth, leading to capital outflows from chipmakers and their suppliers.