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.

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.