Investors are watching closely NVIDIA Corp. NVDA as it prepares to release its second-quarter earnings report on Wednesday, which could cause significant fluctuations in its market value.

What happened: According to a note from Goldman Sachs on Monday, the market value of Nvidia stock could fluctuate by $298 billion after the release of its second-quarter earnings report, Business Insider reported.

Goldman Sachs’ trading desk said option pricing data suggests a potential 9 percent move in either direction for Nvidia stock. This potential swing is based on the company’s $3.17 trillion market capitalization.

Scott RubnerManaging Director at Goldman Sachs, noted that “the bar is much lower for Nvidia this earnings season than it has been in recent quarters,” due to fundamental selling in the technology sector. Nvidia holds the record for the largest one-day market value swing at $330 billion, which occurred in late July.

According to the bank, if Nvidia reports strong growth and forecasts, it could surprise the stock market and lead to a significant move. “Can you imagine NVDA beating expectations on Wednesday?” asked Rubner.

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Interactive Brokers strategist Steve Sosnick highlighted Nvidia’s integral role in the market, noting that more than 70% of the 25 most active trades on their platform have a connection to Nvidia. Sosnick stated, “We’ve become quite accustomed to seeing NVDA at the top of the leaderboard most weeks, cementing its key role in investor psychology.”

Why it is important: Nvidia’s upcoming earnings report is crucial for several reasons. Analysts expect the company to report second-quarter revenue of $28.68 billion, up significantly from $13.5 billion in the year-ago quarter. Nvidia has consistently beaten revenue estimates in seven of the last eight quarters, demonstrating its strong performance.

In addition, Nvidia is positioning itself as a central player in the AI ​​ecosystem, similar to Amazon.com Inc. in e-commerce. Kevin MahnCIO of Hennion & Walshexpects Nvidia to exceed expectations, particularly in the data center business, thereby further cementing its dominance in the AI ​​sector.

However, some experts warn that Nvidia shares could face short-term setbacks. Gene MunsterManaging Partner at Deep Sea Asset Managementpoints to potential supply-demand imbalances and delays at the Blackwell project that could negatively impact investor sentiment despite the company’s long-term growth prospects.

Technical Analyst Carter Braxton Worth remains optimistic about Nvidia and advises investors to adopt a long-term strategy around the earnings period. He believes the company’s stock will continue its uptrend based on technical indicators.

Price promotion: Nvidia stock closed at $128.30 on Tuesday, up 1.46%. In after-hours trading, the stock was down slightly by 0.46%. Year-to-date, NVDA is up an impressive 166.35%, according to data from Benzinga Pro.

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This story was created with Benzinga Neuro and edited by Kaustubh Bagalkote