diff --git a/java/java-analysis-impl/src/com/intellij/codeInspection/ExplicitTypeCanBeDiamondInspection.java b/java/java-analysis-impl/src/com/intellij/codeInspection/ExplicitTypeCanBeDiamondInspection.java
index 9f49666a4c3e..208cada7d9a7 100644
--- a/java/java-analysis-impl/src/com/intellij/codeInspection/ExplicitTypeCanBeDiamondInspection.java
+++ b/java/java-analysis-impl/src/com/intellij/codeInspection/ExplicitTypeCanBeDiamondInspection.java
@@ -1,4 +1,4 @@
-// Copyright 2000-2024 JetBrains s.r.o. and contributors. Use of this source code is governed by the Apache 2.0 license.
+// Copyright 2000-2025 JetBrains s.r.o. and contributors. Use of this source code is governed by the Apache 2.0 license.
 package com.intellij.codeInspection;
 
 import com.intellij.codeInsight.intention.HighPriorityAction;
@@ -51,10 +51,8 @@ public final class ExplicitTypeCanBeDiamondInspection extends AbstractBaseJavaLo
           LOG.assertTrue(classReference != null);
           final PsiReferenceParameterList parameterList = classReference.getParameterList();
           LOG.assertTrue(parameterList != null);
-          for (PsiTypeElement typeElement : parameterList.getTypeParameterElements()) {
-            if (typeElement.getAnnotations().length > 0) {
-              return;
-            }
+          if (PsiTreeUtil.findChildOfType(parameterList, PsiAnnotation.class) != null) {
+            return;
           }
           final PsiElement firstChild = parameterList.getFirstChild();
           final PsiElement lastChild = parameterList.getLastChild();
diff --git a/java/java-tests/testData/codeInsight/daemonCodeAnalyzer/quickFix/explicit2diamond/beforeAnnotated.java b/java/java-tests/testData/codeInsight/daemonCodeAnalyzer/quickFix/explicit2diamond/beforeAnnotated.java
index c2997ed61336..40924530748f 100644
--- a/java/java-tests/testData/codeInsight/daemonCodeAnalyzer/quickFix/explicit2diamond/beforeAnnotated.java
+++ b/java/java-tests/testData/codeInsight/daemonCodeAnalyzer/quickFix/explicit2diamond/beforeAnnotated.java
@@ -18,7 +18,7 @@ class XYZ {
   public static <T> void genericConsumer(T item) {}
 
   public static void main(String[] args) {
-    genericConsumer(new Wrapper<@Nullable<caret>s String>(getString()));
+    genericConsumer(new Wrapper<@Nullable<caret> String>(getString()));
     // below one works great
     Wrapper<@Nullable String> wrapper = new Wrapper<>(getString());
   }
diff --git a/java/java-tests/testData/codeInsight/daemonCodeAnalyzer/quickFix/explicit2diamond/beforeNestedAnnotated.java b/java/java-tests/testData/codeInsight/daemonCodeAnalyzer/quickFix/explicit2diamond/beforeNestedAnnotated.java
new file mode 100644
index 000000000000..5944679a6c0e
--- /dev/null
+++ b/java/java-tests/testData/codeInsight/daemonCodeAnalyzer/quickFix/explicit2diamond/beforeNestedAnnotated.java
@@ -0,0 +1,30 @@
+// "Replace with <>" "false"
+
+import java.util.List;
+
+class XYZ {
+  @Target({ElementType.TYPE_USE, ElementType.METHOD})
+  public @interface Nullable {}
+
+  public final static class Wrapper<T> {
+    private final T value;
+
+    public Wrapper(T value) {
+      this.value = value;
+    }
+  }
+
+  public static List<@Nullable String> getStrings() {
+    String element = ThreadLocalRandom.current().nextBoolean() ? "hello" : null;
+    return Collections.singletonList(element);
+  }
+
+  public static <T> void genericConsumer(T item) {}
+
+  public static void main(String[] args) {
+    // suggests to replace the explicit type below with <>
+    genericConsumer(new Wrapper<L<caret>ist<@Nullable String>>(getStrings()));
+    // below one works great
+    Wrapper<List<@Nullable String>> wrapper = new Wrapper<>(getStrings());
+  }
+}
\ No newline at end of file