Hedge fund manager Dan Loeb takes passive stake in AMD

Dan Loeb at WEF 2014 in Davos, Switzerland.

Justin Solomon | CNBC

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 shares struggled, sources say. AMD stocks have underperformed the rest of the sector over the past 12 months, down more than 30% as the PHLX Semiconductor index fell 14%.

The stock has rebounded 21% this year as China opened up its economy and the global stock market rebounded.

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

The semiconductor sector is struggling with a drop in consumer demand for finished electronics and a glut of parts needed to manufacture PCs and servers.

Loeb is no stranger to the chip industry. It previously owned Intel, AMD’s main 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 outlook for 2023. The company said it expects a 40% drop in year-over-year sales in the March quarter.

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