Third Point's Daniel Loeb takes a passive stake in AMD

Third Point’s Dan Loeb has taken a passive stake in the chipmaker AMDsources told CNBC’s Scott Wapner.

The hedge fund manager took the bet as AMD shares struggled, according to sources. AMD shares 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 bounced back this year by 21% as China opened up its economy and the overall stock market rebounded.

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

The semiconductor sector has struggled with lower consumer demand for finished electronics and an overabundance of parts needed to make computers and servers.

Loeb is no stranger to the chip industry. He previously owned IntelAMD’s main competitor, drives the company to explore “strategic options” after the chipmaker lost market share to TSMC.

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