diff --git a/drivers/misc/habanalabs/gaudi/gaudi.c b/drivers/misc/habanalabs/gaudi/gaudi.c
index 25d735aee6a3..e6bfaf55c6b6 100644
--- a/drivers/misc/habanalabs/gaudi/gaudi.c
+++ b/drivers/misc/habanalabs/gaudi/gaudi.c
@@ -7717,10 +7717,10 @@ static void gaudi_handle_eqe(struct hl_device *hdev,
 	struct gaudi_device *gaudi = hdev->asic_specific;
 	u64 data = le64_to_cpu(eq_entry->data[0]);
 	u32 ctl = le32_to_cpu(eq_entry->hdr.ctl);
-	u32 fw_fatal_err_flag = 0;
+	u32 fw_fatal_err_flag = 0, flags = 0;
 	u16 event_type = ((ctl & EQ_CTL_EVENT_TYPE_MASK)
 			>> EQ_CTL_EVENT_TYPE_SHIFT);
-	bool reset_required;
+	bool reset_required, reset_direct = false;
 	u8 cause;
 	int rc;
 
@@ -7808,7 +7808,8 @@ static void gaudi_handle_eqe(struct hl_device *hdev,
 			dev_err(hdev->dev, "reset required due to %s\n",
 				gaudi_irq_map_table[event_type].name);
 
-			hl_device_reset(hdev, 0);
+			reset_direct = true;
+			goto reset_device;
 		} else {
 			hl_fw_unmask_irq(hdev, event_type);
 		}
@@ -7830,7 +7831,8 @@ static void gaudi_handle_eqe(struct hl_device *hdev,
 			dev_err(hdev->dev, "reset required due to %s\n",
 				gaudi_irq_map_table[event_type].name);
 
-			hl_device_reset(hdev, 0);
+			reset_direct = true;
+			goto reset_device;
 		} else {
 			hl_fw_unmask_irq(hdev, event_type);
 		}
@@ -7981,12 +7983,17 @@ static void gaudi_handle_eqe(struct hl_device *hdev,
 	return;
 
 reset_device:
-	if (hdev->asic_prop.fw_security_enabled)
-		hl_device_reset(hdev, HL_DRV_RESET_HARD
-					| HL_DRV_RESET_BYPASS_REQ_TO_FW
-					| fw_fatal_err_flag);
+	reset_required = true;
+
+	if (hdev->asic_prop.fw_security_enabled && !reset_direct)
+		flags = HL_DRV_RESET_HARD | HL_DRV_RESET_BYPASS_REQ_TO_FW | fw_fatal_err_flag;
 	else if (hdev->hard_reset_on_fw_events)
-		hl_device_reset(hdev, HL_DRV_RESET_HARD | HL_DRV_RESET_DELAY | fw_fatal_err_flag);
+		flags = HL_DRV_RESET_HARD | HL_DRV_RESET_DELAY | fw_fatal_err_flag;
+	else
+		reset_required = false;
+
+	if (reset_required)
+		hl_device_reset(hdev, flags);
 	else
 		hl_fw_unmask_irq(hdev, event_type);
 }