(Reuters) -U.S. chipmaker Advanced Micro Devices (NASDAQ:) on Tuesday beat Wall Street expectations for quarterly revenue, helped by growth in its data center business even as it forecast sales below estimates in the current quarter.

AMD shares rose 3% after hours. They closed up 3.7% on Tuesday.

"Although the demand environment is mixed, we are confident in our ability to gain market share in 2023 and deliver long-term growth based on our differentiated product portfolio," AMD Chief Lisa Su said.

Data Center segment revenue grew 42% to $1.7 billion during the fourth quarter.

AMD's forecast mirrored (NASDAQ:)'s gloomy outlook for the PC market, which, according to Intel Chief Executive Pat Gelsinger, is seeing "some of the largest inventory corrections literally that we've ever seen in the industry."

PC shipments fell 16.5% to 292.3 million units in 2022, according to data from research firm IDC.

The chip designer had already started under-shipping in response to plummeting processor demand as customers looked to clear their inventory stash before buying more chips.

This decline led chipmakers to slash revenue forecasts, triggering a sell-off in chip stocks. AMD's stock fell 55% last year, underperforming the during an industry downturn.

Slowing demand for graphics cards, used to enhance visuals and performance on personal computers, also took a toll, while growing signs of enterprise and cloud spending slowdown was an added blow.

Adjusted fourth-quarter revenue rose 16% to $5.60 billion. Analysts on average were expecting revenue of $5.50 billion, according to Refinitiv data.

The company forecast current-quarter revenue of $5.3 billion, plus or minus $300 million. Analysts on average expected revenue of $5.48 billion, according to Refinitiv data.