The biggest earnings report of next week, and potentially for the quarter, is Nvidia’s (NADAQ:NVDA) upcoming Q2 2024 results, due on Feb. 21. Ahead of this report, NVDA stock continues to perform well, currently trading around 2% off its all-time high which has been set in recent days.

The question many investors have heading into this print is whether or not a repeat of the company’s previous results could be on tap. Nvidia’s incredible volatility around previous earnings releases has some investors locking in their gains, using options as a way to hedge against volatility.

For existing investors heading into this print, outsized volatility could go either way. Unless investors see another guidance raise, a massive beat, and bullish commentary in the earnings call, it’s possible we could see NVDA stock dip. Thus, I understand the sentiment here.

But given Nvidia’s recent trajectory, its previous price action around earnings, and overall sentiment around AI-related companies, it’s also possible we could see Nvidia surge in the coming week.

Let’s dive into what investors should look for heading into this print.

Will NVDA Stock Surge or Plummet Following Earnings Next Week

One thing’s for certain heading into Nvidia’s Feb. 21 report — investors aren’t betting on the stock standing still.

According to current options pricing, investors are betting on a swing of around 11% from where shares trade right now. This swing could happen in either direction, with big money managers clearly hedging positions (on the upside and downside) ahead of this report.

This hedging activity suggests one of the largest expected moves in the company’s recent earnings reports and could mean we’re set up for fireworks over the coming trading days. Heading into this report, it will also be interesting to see if NVDA stock continues to hover around current levels or moves upward or downward in anticipation of earnings.

Notably, the expected move we’re going to see in NVDA stock next week is about double the stock’s average shift post-earnings. And given where shares trade now, I can see why that would be the case.

Personally, I think Nvidia’s current valuation factors in plenty of exuberance, which could mean that immediate downside could be more likely than a potential surge. However, I’m not going to rule anything out, and the market doesn’t seem to have made up its mind yet. Options are a risky game to begin with, so those looking to play Nvidia with naked options may be playing with fire as well — this is a stock that’s proven its worth as a buy-and-hold position but can be very volatile and perhaps not as profitable as a trading vehicle over the longer-term.

If I owned Nvidia stock here, I’d be open to hedging with some puts. If I didn’t own this stock but wanted some exposure to potential gains, owning a small position via calls may make sense. And for those looking to capture the spread of such a high implied move, a straddle may be the best option. But I’d gather for most cautious long-term investors, staying away from any sort of trading activity around this print may be the most profitable move.

On the date of publication, Chris MacDonald did not have (either directly or indirectly) any positions in the securities mentioned in this article. The opinions expressed in this article are those of the writer, subject to the InvestorPlace.com Publishing Guidelines.