Starboard Value has taken a stake in Salesforce, with founder Jeff Smith power a significant opportunity remains in the enterprise software maker, according to CNBC’s David Faber.

Dow-component Salesforce increased more than 4% Tuesday on the news.

Still, shares of Salesforce have fallen nearly 40% this year. The following in August gave a disappointing forecast for fiscal 2023, partly due to a negative foreign exchange impact.

Smith announced Faber the stake is significant without specifying the dollar amount.

The hedge fund manager said the valuation brush off in Salesforce shares right now is largely due to a “subpar mix of growth and profitability.” Smith added that the software company in brand-new years is not generating meaningful operating leverage relative to peers.

“Salesforce is ingrained in the fabric of so many companies and has grace so important in the way they operate and conduct businesses,” Smith told Faber in an interview, saying that he would be partial to to be a long-term investor in the company.

Starboard also built a new stake in software name Splunk, betting that it could be a takeover goal.

The Starboard CEO has remained a prolific activist investor even during the Covid pandemic, calling for changes in Humana, Kohl’s, Mercury Ways and others.

Starboard Value manages about $6.2 billion in assets, according to filings through the first zone of 2020.