Activist Investor Dan Loeb Builds Passive Stake in AMD

Billionaire investor Daniel Loeb on Thursday told investors in his hedge fund Third Point the firm has invested in chip designer Advanced Micro Devices, a source familiar with the matter said.

Third Point, which occasionally pursues an activist strategy and pushes for changes at companies, is not planning to press for changes at AMD and the investment can be considered a passive stake, the person familiar with the fund said.

A spokesperson for Loeb declined to comment and AMD declined to comment.

AMD, which designs chips used in PCs, data centers and gaming consoles Xbox and PlayStation, has seen its stock rise about 21% this year, as analysts expect the firm and its peer Nvidia Corp to power the technology behind AI chatbots such as ChatGPT.

The chip firm’s market value, at roughly $125 billion, has pulled ahead of key rival Intel Corp, as its strategy to outsource chipmaking to contract manufacturers such as TSMC helped it gain a technological lead.

Intel, which designs and makes its own chips, stumbled in its efforts to create technological advantages and has been playing catch up with rivals, who are gnawing away at its market share.

In late 2020, Third Point built a position in Intel and pushed the company to attract fresh talent, keep its best people and explore deal options. By early 2021, Intel had replaced its chief executive officer.

Chief Executive Pat Gelsinger returned to Intel from VMware Inc to shake up Intel’s strategy, including providing firms its chipmaking service.

Shares of AMD were up about 2% in late afternoon trade. CNBC reported on the stake earlier.

(Reuters)

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