Aug 12 (Reuters) - Cerebras Systems ( CBRS ) raised its annual revenue and gross margin forecasts on Wednesday, buoyed by robust demand for its chips from companies ramping up data-center capacity to power AI services.

Still, its shares were down more than 7% in extended trading. The stock has gained 15.5% week-to-date.

The chip designer is banking on growing demand for inference, the data crunching that occurs when a user queries a chatbot, as it seeks to challenge Nvidia's ( NVDA ) dominance in the AI processor market.

Cerebras' flagship wafer-scale engine (WSE) is a single chip the size of a dinner plate containing trillions of transistors, a design that it says is more efficient than connecting thousands of smaller graphics processors together, as Nvidia ( NVDA ) does.

By placing memory directly on the chip, the WSE is built to accelerate inference and reduce the data-transfer delays associated with conventional graphics processors that rely on separate high-bandwidth memory.

"We have made rapid progress in key areas required to deliver exceptional growth against our remaining performance obligations of $25.4 billion (contract revenue expected to be recognized in the future), and plan to more than triple revenue in 2027," finance chief Bob Komin said.

The Sunnyvale, California-based company expects 2026 adjusted revenue between $880 million and $890 million, higher than its previous forecast of $855 million to $865 million.

Annual adjusted gross margin is forecast at 41% to 43%, up from 38% to 41% projected earlier. Analysts, on average, estimate 35.89%, according to data compiled by LSEG.

Second-quarter sales rose 74.3% to $180.11 million. Adjusted loss was $6.91 million, narrower than the $40.5-million loss a year ago.

Cerebras is racing to expand chip volumes to support a $20 billion multi-year agreement to provide AI compute to OpenAI, a deal viewed as key to justifying its valuation.

Its core cloud and services revenue, which reflects the OpenAI ramp, nearly quadrupled to $127.73 million in the second quarter.