Earnings reports from Cisco and Salesforce.com could translate to a cumulative $11 billion shift in market cap, according to RiskReversal's Dan Nathan.
The options market is implying a greater-than-average move for the companies, which release earnings after Wednesday's closing bell.
According to Nathan, Cisco could see a 5 percent rally or decline after its report, which translates to a roughly $7 billion swing in market cap value for the company.
Options traders calculate the implied move for stocks by determining a company's "straddle," which is at the money puts and calls. The value of the straddle is a typically strong indicator of investors' expectations for the amount in which the stock could move.
"They have a lot of revenue exposure outside of the U.S. and that's where they expect to get a lot of their growth," Nathan said about Cisco, which is down nearly 2 percent on the year. However, Nathan cautioned that while Cisco is a cheap stock with a strong balance sheet, it has a lot of emerging market and dollar exposure.
There is potential for upside: In the past five quarters, Cisco's stock has rallied 9.5 percent on two different occasions following earnings.
Nathan said cloud computing company Salesforce.com could move as much as 8 percent after reporting earnings, which equals around $4 billion in market cap movement.
"On average, the stock has moved about 5 percent over the last four quarters" on the day after earnings reports, said Nathan. He also noted that SalesForce.com has seen two different rallies of 11 percent in the last five quarters following earnings.
The tech sector has been the focus of investors in the last few weeks as the market grappled with poor earnings from Apple, and relished in big beats from Facebook and Amazon. The XLK ETF, which tracks the sector, is up more than 1 percent in the month of May, outpacing the S&P 500.
