Activist hedge fund manager Dan Loeb takes a passive stake in AMD

Third Point’s Dan Loeb has taken a passive stake in chipmaker AMD, sources told CNBC’s Scott Wapner.

The hedge fund manager took the bet when AMD shares struggled, according to sources. AMD shares have underperformed the rest of the sector over the last 12 months, down more than 30% as the PHLX Semiconductor Index declined 14%.

The stock has bounced back this year by 21% as China opened up its economy and the overall stock market has rebounded.

AMD recently reported fourth quarter earnings that exceeded Wall Street expectations, but guided for a 10% decline in year-over-year sales in the current quarter.

The semiconductor sector has been grappling with lower consumer demand for finished electronics and gluts of parts needed to make PCs and servers.

Loeb is no stranger to the chip industry. He previously owned Intel, AMD’s primary competitor, pushing the company to explore “strategic alternatives” after the chipmaker lost market share to TSMC.

Intel reported a disastrous quarter in January that included a weak 2023 outlook. The company said it expects a 40% year-over-year decline in sales in the March quarter.