Hedge fund manager Daniel Loeb is bullish on Amazon , telling investors in a letter that the company is dramatically undervalued and should see improvement in its fundamentals soon. The Third Point founder said in a letter detailing his fourth-quarter moves that his fund "significantly increased" its position late in the year in anticipation of pivotal moves from Amazon's new executive team. Filings this week revealed Loeb had increased his stake . "It's not often that you get to buy shares in a high-quality company at the low end of its valuation range ahead of a meaningful reacceleration in growth at a 30%-40% discount to its present intrinsic value with an almost unlimited runway of potential to compound in value," the letter said. Amazon's stock is down 8% over the past year and is trading near where it was in July 2020, as rising costs have partially offset surging e-commerce sales during the pandemic and tech stocks have fallen out of favor in recent months. However, Loeb said that some of the recent negatives for the company were temporary and close to dissipating. "The long-term secular growth drivers for the company—cloud adoption and eCommerce penetration—remain firmly intact," Loeb continued. "Sales growth ought to reaccelerate as revenue comps ease. Fixed cost leverage should improve after a large investment cycle that effectively doubled the fulfillment capacity of the company over the past two years. Excess costs associated with the Covid pandemic, labor shortages, and supply chain disruption should start to disappear as the external environment normalizes." Loeb also mentioned Amazon repurchasing shares in January as a bullish sign for investors in the company. Third Point had a position of more than $783 million in the stock at the end of December, with 50,000 shares added during the quarter, according to securities filings. In the letter, Loeb struck an optimistic tone about the overall economy, saying that supply chain issues should ease to help lower inflation and that consumer balance sheets remain strong. He said that one area he was looking for opportunities this year was value-driven "old" tech, such as Intel. "Although conditions will continue to be volatile, this environment offers exciting opportunities, particularly in event-driven and value investing, which was our bread and butter for many years," the letter said. In the letter, Loeb said that Third Point Offshore Fund lost 5.3% in the fourth quarter but ended 2021 up 22.7%. -CNBC's Michael Bloom contributed to this report.