Options traders price in Nvidia's quarterly results as a more pivotal event for the broader market than the upcoming interest rate decision or the monthly inflation and jobs reports.

Certain research has shown that investors tend to put too much faith in past earnings. Over time, this leads to a stock being overbought in the lead-up to an earnings release and a short-term dip after the release. What Nvidia is experiencing is very normal.

Investors have high hopes for the chipmaker, the world’s most valuable company, which has enormous influence over the stock market.

Discover key insights, expectations and market trends to watch ahead of Nvidia’s earnings report. Here’s what investors should know.

There’s little question why: Nvidia is clearly the King of AI, with massive, household-name customers like Microsoft (MSFT), Google (GOOG), Amazon (AMZN), and more scooping up its semiconductors and hardware at a ferocious clip to amp up their AI-driven offerings.

Nvidia’s monster third quarter, bullish guidance, and multi-trillion dollar potential was not enough to satisfy Wall Street. Similar to what happened last quarter, the world’s largest stock ticked more than two percent lower in overnight trading following the blowout earnings report: