Applied Materials shares fell 7% to $672.50 after Michael Burry disclosed short positions against AI leaders. The decline was part of a broader semiconductor rout that dragged Micron and Sandisk down 11% each. The Nasdaq Composite dropped 0.66% as tech profit-taking intensified.
Applied Materials shares tumbled 7% to $672.50, erasing about $40 billion in market value, as a broad selloff in semiconductor stocks deepened after Michael Burry disclosed short positions against several AI leaders.
The decline in the chip-equipment maker, which now holds a market capitalization of $533.9 billion, was part of a wider rout that dragged memory-chip makers Micron Technology and Sandisk down 11% each. The selloff was concentrated in semiconductor and infrastructure stocks, while communications and financial services sectors posted gains. Palantir Technologies climbed 8% on a deal with Nvidia, bucking the broader tech weakness.
Burry, the investor known for his bet against subprime mortgages before the 2008 financial crisis, has taken short positions against Nvidia and Applied Materials, according to regulatory filings. The news added to profit-taking pressure on chip stocks that had surged earlier this year on AI enthusiasm. Meta Platforms' announcement that it would move into cloud computing further pressured infrastructure names, sending CoreWeave down 14%.
The selloff comes as the Institute for Supply Management's June manufacturing survey showed growth slowing and prices dropping, data that could ease some upward pressure on inflation. The 10-year Treasury yield edged up to 4.48%, while gold rose 0.26% to $4,048.90. Federal Reserve Chairman Kevin Warsh, speaking at the European Central Bank Forum, offered few clues on potential rate changes but reiterated his commitment to bringing down inflation.
For investors, the Applied Materials decline shows that even the semiconductor equipment sector — which directly benefits from AI-driven chip manufacturing demand — is not immune to valuation concerns after months of outsized gains. The broader Nasdaq Composite fell 0.66% to 26,040.03, while the S&P 500 slipped 0.22% to 7,483.23. The Dow Jones Industrial Average hit an intraday record before closing nearly flat at 52,305.24, a sign the selloff was concentrated in technology stocks rather than the broader market.
Applied Materials competes with Lam Research and Tokyo Electron in the wafer fabrication equipment market, a sector that has seen elevated valuations as AI chip demand drives fab expansion. The company's equipment is used in manufacturing advanced chips at TSMC and Samsung, making it a bellwether for semiconductor capital expenditure trends. Any sustained pullback in Applied Materials shares could indicate broader concerns about the sustainability of AI-driven chip spending, particularly if it leads to delayed fab construction or reduced capital expenditure forecasts from major foundries.
This article is for informational purposes only and does not constitute investment advice.
