diff --git a/java/codeserver/highlighting/src/com/intellij/java/codeserver/highlighting/ExpressionChecker.java b/java/codeserver/highlighting/src/com/intellij/java/codeserver/highlighting/ExpressionChecker.java
index 2013e2d0d7f1f..196afa8fc5d98 100644
--- a/java/codeserver/highlighting/src/com/intellij/java/codeserver/highlighting/ExpressionChecker.java
+++ b/java/codeserver/highlighting/src/com/intellij/java/codeserver/highlighting/ExpressionChecker.java
@@ -32,6 +32,7 @@
 import com.intellij.psi.PsiAssignmentExpression;
 import com.intellij.psi.PsiBreakStatement;
 import com.intellij.psi.PsiCall;
+import com.intellij.psi.PsiCallExpression;
 import com.intellij.psi.PsiClass;
 import com.intellij.psi.PsiClassObjectAccessExpression;
 import com.intellij.psi.PsiClassType;
@@ -424,7 +425,7 @@ void checkMethodCall(@NotNull PsiMethodCallExpression methodCall) {
   }
 
   void checkInferredTypeArguments(@NotNull PsiTypeParameterListOwner listOwner,
-                                  @NotNull PsiMethodCallExpression call,
+                                  @NotNull PsiCallExpression call,
                                   @NotNull PsiSubstitutor substitutor) {
     PsiTypeParameter[] typeParameters = listOwner.getTypeParameters();
     Pair<PsiTypeParameter, PsiType> inferredTypeArgument = GenericsUtil.findTypeParameterWithBoundError(
@@ -1268,25 +1269,16 @@ else if (aClass.isInterface() && constructorCall instanceof PsiNewExpression new
 
     PsiMethod constructor = result == null ? null : result.getElement();
 
-    boolean applicable = true;
     try {
       PsiDiamondType diamondType =
         constructorCall instanceof PsiNewExpression newExpression ? PsiDiamondType.getDiamondType(newExpression) : null;
       JavaResolveResult staticFactory = diamondType != null ? diamondType.getStaticFactory() : null;
-      if (staticFactory instanceof MethodCandidateInfo info) {
-        if (info.isApplicable()) {
-          result = info;
-          if (constructor == null) {
-            constructor = info.getElement();
-          }
-        }
-        else {
-          applicable = false;
+      if (staticFactory instanceof MethodCandidateInfo info && info.isApplicable()) {
+        result = info;
+        if (constructor == null) {
+          constructor = info.getElement();
         }
       }
-      else {
-        applicable = result != null && result.isApplicable();
-      }
     }
     catch (IndexNotReadyException ignored) {
     }
@@ -1300,24 +1292,39 @@ else if (aClass.isInterface() && constructorCall instanceof PsiNewExpression new
         constructorCall, new JavaErrorKinds.UnresolvedConstructorContext(aClass, results)));
       return;
     }
+
+    if (constructorCall instanceof PsiNewExpression newExpression) {
+      PsiReferenceParameterList typeArgumentList = newExpression.getTypeArgumentList();
+      myVisitor.myGenericsChecker.checkReferenceTypeArgumentList(constructor, typeArgumentList, result.getSubstitutor());
+    }
+
     if (classReference != null && !constructor.isDefaultConstructor() &&
         (!result.isAccessible() ||
          constructor.hasModifierProperty(PsiModifier.PROTECTED) && callingProtectedConstructorFromDerivedClass(constructorCall, aClass))) {
       myVisitor.myModifierChecker.reportAccessProblem(classReference, constructor, result);
       return;
     }
-    if (!applicable) {
-      checkIncompatibleCall(list, result);
+    if (myVisitor.hasErrorResults()) return;
+
+    if (result.isApplicable()) {
+      checkVarargParameterErasureToBeAccessible(result, constructorCall);
       if (myVisitor.hasErrorResults()) return;
+      checkIncompatibleType(constructorCall, result, constructorCall);
+    }
+    else if (result.isTypeArgumentsApplicable()) {
+      checkIncompatibleCall(list, result);
     }
     else if (constructorCall instanceof PsiNewExpression newExpression) {
+
       PsiReferenceParameterList typeArgumentList = newExpression.getTypeArgumentList();
-      myVisitor.myGenericsChecker.checkReferenceTypeArgumentList(constructor, typeArgumentList, result.getSubstitutor());
-      if (myVisitor.hasErrorResults()) return;
+      PsiSubstitutor applicabilitySubstitutor = result.getSubstitutor(false);
+      if (typeArgumentList.getTypeArguments().length == 0 && constructor.hasTypeParameters()) {
+        checkInferredTypeArguments(constructor, newExpression, applicabilitySubstitutor);
+      }
+      else {
+        myVisitor.myGenericsChecker.checkReferenceTypeArgumentList(constructor, typeArgumentList, applicabilitySubstitutor);
+      }
     }
-    checkVarargParameterErasureToBeAccessible(result, constructorCall);
-    if (myVisitor.hasErrorResults()) return;
-    checkIncompatibleType(constructorCall, result, constructorCall);
   }
 
   private static boolean callingProtectedConstructorFromDerivedClass(@NotNull PsiConstructorCall place,
diff --git a/java/codeserver/highlighting/src/com/intellij/java/codeserver/highlighting/errors/JavaErrorKinds.java b/java/codeserver/highlighting/src/com/intellij/java/codeserver/highlighting/errors/JavaErrorKinds.java
index 236fa4642da24..cac56780c72f1 100644
--- a/java/codeserver/highlighting/src/com/intellij/java/codeserver/highlighting/errors/JavaErrorKinds.java
+++ b/java/codeserver/highlighting/src/com/intellij/java/codeserver/highlighting/errors/JavaErrorKinds.java
@@ -33,6 +33,7 @@
 import com.intellij.psi.PsiAssignmentExpression;
 import com.intellij.psi.PsiBreakStatement;
 import com.intellij.psi.PsiCall;
+import com.intellij.psi.PsiCallExpression;
 import com.intellij.psi.PsiCaseLabelElement;
 import com.intellij.psi.PsiCaseLabelElementList;
 import com.intellij.psi.PsiCatchSection;
@@ -730,15 +731,15 @@ private JavaErrorKinds() {}
     parameterized(PsiMethodCallExpression.class, IncompatibleIntersectionContext.class, "type.parameter.incompatible.upper.bounds")
       .withRange((call, ctx) -> getRange(call))
       .withDescription((call, ctx) -> message("type.parameter.incompatible.upper.bounds", ctx.parameter().getName(), ctx.message()));
-  public static final Parameterized<PsiMethodCallExpression, TypeParameterBoundMismatchContext>
+  public static final Parameterized<PsiCallExpression, TypeParameterBoundMismatchContext>
     TYPE_PARAMETER_INFERRED_TYPE_NOT_WITHIN_EXTEND_BOUND =
-    parameterized(PsiMethodCallExpression.class, TypeParameterBoundMismatchContext.class,
+    parameterized(PsiCallExpression.class, TypeParameterBoundMismatchContext.class,
                   "type.parameter.inferred.type.not.within.extend.bound")
       .withDescription((call, ctx) -> message("type.parameter.inferred.type.not.within.extend.bound", formatClass(ctx.parameter()),
                                               formatType(ctx.bound()), formatType(ctx.actualType())));
-  public static final Parameterized<PsiMethodCallExpression, TypeParameterBoundMismatchContext>
+  public static final Parameterized<PsiCallExpression, TypeParameterBoundMismatchContext>
     TYPE_PARAMETER_INFERRED_TYPE_NOT_WITHIN_IMPLEMENT_BOUND =
-    parameterized(PsiMethodCallExpression.class, TypeParameterBoundMismatchContext.class,
+    parameterized(PsiCallExpression.class, TypeParameterBoundMismatchContext.class,
                   "type.parameter.inferred.type.not.within.implement.bound")
       .withDescription((call, ctx) -> message("type.parameter.inferred.type.not.within.implement.bound", formatClass(ctx.parameter()),
                                               formatType(ctx.bound()), formatType(ctx.actualType())));
diff --git a/java/java-tests/testData/codeInsight/daemonCodeAnalyzer/genericsHighlighting8/IDEA386630.java b/java/java-tests/testData/codeInsight/daemonCodeAnalyzer/genericsHighlighting8/IDEA386630.java
new file mode 100644
index 0000000000000..3bffded5cd40d
--- /dev/null
+++ b/java/java-tests/testData/codeInsight/daemonCodeAnalyzer/genericsHighlighting8/IDEA386630.java
@@ -0,0 +1,41 @@
+import java.util.function.Function;
+
+class A {
+  private <T extends Number> A(T t) {}
+
+  private static <T extends Number> void use(T t) {}
+
+  static {
+    new <<error descr="Type parameter 'java.lang.String' is not within its bound; should extend 'java.lang.Number'">String</error>>A();
+    A.<<error descr="Type parameter 'java.lang.String' is not within its bound; should extend 'java.lang.Number'">String</error>>use();
+
+  }
+}
+
+class B {
+  static {
+    new <error descr="Wrong number of type arguments: 2; required: 1">< String , Number ></error> <error descr="'A(java.lang.String)' has private access in 'A'">A</error> ( ) ;
+    A . <error descr="Wrong number of type arguments: 2; required: 1">< String , Number ></error> <error descr="'use(java.lang.String)' has private access in 'A'">use</error> ( ) ;
+  }
+}
+
+
+class C {
+  static {
+    <error descr="Inferred type 'B' for type parameter 'B' is not within its bound; should extend 'C.Builder<C.Alfa>'">new C(C::string)</error>;
+    <error descr="Inferred type 'B' for type parameter 'B' is not within its bound; should extend 'C.Builder<C.Alfa>'">C.use(C::string)</error>;
+  }
+
+  private static <T extends Alfa, B extends Builder<T>> void use(final Function<B, String> f1) {}
+
+  private <T extends Alfa, B extends Builder<T>> C(final Function<B, String> f1) {}
+
+  private static String string(final Builder<? extends Beta> builder) {
+    return "";
+  }
+
+  static class Alfa {}
+  static class Beta extends Alfa {}
+
+  static class Builder<T> {}
+}
\ No newline at end of file
diff --git a/java/java-tests/testSrc/com/intellij/java/codeInsight/daemon/lambda/GenericsHighlighting8Test.java b/java/java-tests/testSrc/com/intellij/java/codeInsight/daemon/lambda/GenericsHighlighting8Test.java
index 49bec2abe0755..67f9297616325 100644
--- a/java/java-tests/testSrc/com/intellij/java/codeInsight/daemon/lambda/GenericsHighlighting8Test.java
+++ b/java/java-tests/testSrc/com/intellij/java/codeInsight/daemon/lambda/GenericsHighlighting8Test.java
@@ -1213,4 +1213,7 @@ public void testTooltipComponents() {
 
   @TestFor(issues = "IDEA-385574")
   public void testIDEA385574(){ doTest(); }
+
+  @TestFor(issues = "IDEA-386630")
+  public void testIDEA386630(){ doTest(); }
 }