Participants in the U.S. equity options market are anticipating that Nvidia's forthcoming earnings report will trigger a fluctuation exceeding $300 billion in the stock of the leading artificial intelligence chip manufacturer.

Data from analytics firm ORATS indicates that options pricing reflects an expected movement of approximately 9.8% in Nvidia's shares on Thursday, following the earnings announcement. This projection surpasses the anticipated fluctuations prior to any Nvidia earnings report over the past three years and is significantly higher than the stock's average post-earnings movement of 8.1% during the same timeframe, as reported by ORATS.

With Nvidia's market capitalization estimated at around $3.11 trillion, a 9.8% change in share value would equate to roughly $305 billion, potentially marking the largest expected earnings shift for any company in history, according to analysts.

Such a significant movement would exceed the market capitalization of 95% of S&P 500 companies, including major players like Netflix and Merck, based on data from LSEG.

Nvidia's recent performance, recognized for its chips that are considered the benchmark in artificial intelligence, carries significant ramifications for the overall market. The company's stock has surged approximately 150% this year, contributing to about 25% of the S&P 500's 18% increase year-to-date.

"By itself, it has played a major role in enhancing the overall profitability of the S&P 500," stated Steve Sosnick, chief strategist at Interactive Brokers. "It’s like Atlas supporting the market."

Current options pricing indicates that traders are more focused on the potential for a substantial upward movement in Nvidia's stock rather than the risk of a significant decline.

According to an analysis of options data by Susquehanna Financial, traders are estimating a 7% likelihood that the stock will increase by over 20% by Friday, while the probability of a decline exceeding 20% is only 4%.

"Typically, ahead of earnings, investors seek to purchase hedges or insurance, but in Nvidia's situation, much of that insurance is driven by FOMO," Sosnick noted, referencing the common term for "fear of missing out."

"They are eager not to miss a potential rally."

One of the factors contributing to the significant price movement anticipated by options traders for Nvidia is the historical volatility of the company's shares.

According to a Reuters analysis of Trade Alert data, Nvidia's average 30-day historical volatility this year—indicating the extent of stock price fluctuations over a rolling 30-day period—is approximately double that of other companies with market capitalizations exceeding $1 trillion.

"The options are simply mirroring the actual movements of the stock," stated Christopher Jacobson, a strategist at Susquehanna Financial Group, which actively trades Nvidia's securities.

"This reflects ongoing uncertainty and optimism regarding AI and the potential market size, along with Nvidia's status as a highly monitored stock among both institutional and retail investors," he added.