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

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

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

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

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

“Salesforce is ingrained in the fabric of so many companies and has become so important in the way they operate and conduct businesses,” Smith told Faber in an interview, saying that he would like 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 target.

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

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