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after the market closes on wednesday eastern time, nvidia, the "first stock in the universe," will release its second-quarter financial report.

goldman sachs predicts that as the world's most watched stock, nvidia's financial report may cause its stock price to fluctuate by more than 9%. as of tuesday's close, nvidia's market value was $3.15 trillion. this means that its market value may fluctuate by $298 billion - which is higher than the total market value of 95% of the companies in the s&p 500 index.

goldman sachs: markets may be caught off guard

as of now, nvidia also holds the record for the largest single-day market value fluctuation in the history of u.s. stocks: us$330 billion, which was set at the end of july this year when nvidia's stock price rebounded from a painful decline that lasted for several weeks.

goldman sachs' trading desk estimates that nvidia's latest earnings report could cause a 9% move based on recent options pricing data. goldman sachs said that if nvidia's earnings report shows solid quarterly growth and provides stronger forward guidance, it could surprise the stock market and lead to a sharp rise in its stock price.

"can you imagine nvidia beating earnings expectations on wednesday?" asked scott rubner, managing director of trading at goldman sachs.

goldman sachs noted that investors around the world have been net selling tech stocks in the past few weeks: "it stocks have been net sold for the fourth consecutive week and have set a record for the largest net sell-off in the past two months, as the sector (it stocks) has been net sold in every region driven by longs and shorts."

in other words, stock positioning suggests that most investors would likely be caught off guard if nvidia were to rally after its earnings report on wednesday.

the overall impact on the us stock market is huge

nvidia is currently the second-largest company by market value in the s&p 500, with a weighting of about 6.5%, so its results can have a significant impact on the overall market.

in fact, interactive brokers strategist steve sosnick has already highlighted nvidia's importance to other markets.

on tuesday, eastern time, sosnick analyzed the 25 most active trades on the interactive brokers platform, of which more than 70% were related to nvidia.

nvidia ranked first, followed by tesla, which is also nvidia's main customer. nvidia's main competitor amd ranked third, and the semiconductor etf ranked fourth.

overall, nvidia was linked to 18 of the top 25 most active trades at interactive brokers, sosnick said.

"we've become accustomed to seeing nvidia at the top of the charts, which solidifies its key role in investor psyche. beyond that, it's clear that the company plays a vital role in influencing other widely popular investment vehicles," sosnick said.