Activist hedge fund manager Dan Loeb is taking 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 gamble when AMD stock was struggling, sources said. AMD stock has underperformed the rest of the industry over the past 12 months, dropping more than 30% while the PHLX Semiconductor Index fell 14%.

The stock is up 21% this year as China opened its economy and the overall stock market recovered.

AMD recently reported fourth-quarter earnings that beat Wall Street expectations, but led to a 10% year-over-year revenue decline in the current quarter.

The semiconductor industry is struggling with lower consumer demand for finished electronics and an overabundance of parts needed to make PCs and servers.

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

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