NEW YORK, May 21 (Reuters) - Traders are pricing in a

big move for Nvidia's ( NVDA ) shares after the chipmaker reports

earnings on Wednesday, though expectations for volatility are

more muted than in the past, U.S. options markets show.

Nvidia's ( NVDA ) options are primed for an 8.7% swing in either

direction by Friday, according to data from options analytics

firm Trade Alert. That would translate to a market cap swing of

$200 billion - larger than the market capitalization for about

90% of S&P 500 companies.

While massive by most measures, that implied move would fall

far short of the 16.4% jump Nvidia's ( NVDA ) shares notched after the

company's most recent quarterly earnings report. It is also less

aggressive than the average 12% move traders had priced for the

last eight quarters.

"Volatility and expectations had been a fair amount higher

the last time around," said Chris Murphy, co-head of derivative

strategy at Susquehanna Financial Group.

Nvidia ( NVDA ), up about 87% this year, is seen as a bellwether of

the burgeoning AI industry and has a market value of about $2.3

trillion, making it the third-largest company on Wall Street,

behind Microsoft and Apple. Wall Street is betting on a blowout

quarterly report from Nvidia ( NVDA ).

Investor interest has spread out to other beneficiaries of

the AI theme in recent months.

"AI benefits are broadening out to power, commodities and

utilities," BofA strategists including Gonzalo Asis wrote in a

note on Monday. "It's not just about NVDA anymore."

BofA's strategists expect the company to drive 9% of the S&P

500 earnings growth over the next 12 months, compared to 37%

over the last 12 months.

That's not to say the upcoming earnings report is expected

to be uneventful for the company's share price.

Matt Amberson, founder of options analytics service ORATS,

noted that implied volatility for out of the money calls is

roughly equal to that of out of the money puts. That suggests

options traders are not writing off the possibility of more

upside for the stock, despite its already-hefty year-to-date

gains.

"Traders expect up moves to be as violent as down moves,"

Amberson said.

Nvidia ( NVDA ) is expected to post earnings of $5.59 a share, and a

rise in quarterly revenue to $24.65 billion from $7.19 billion a

year ago, according to LSEG data.

Steve Sosnick, chief strategist at Interactive Brokers, said

a downturn in Nvidia ( NVDA ) could test investors' resolve regarding the

broader AI trade.

"Yes, the rally has broadened out, but I'm not sure how

sturdy it would be if Nvidia ( NVDA ) sold off hard," he said.

"There is a lot riding on the AI trade," Sosnick said.