Nvidia's quarterly results exceeded expectations, alleviating concerns about the overheating issues with its Blackwell chips. The company acknowledged that it is struggling to meet the demand for these AI chips and expects gross margins to improve next year.

Palo Alto Networks also delivered a strong performance, with a 21% increase in remaining performance obligations, a key metric for assessing future revenue. CEO Nikesh Arora emphasized on "Mad Money" that billings are no longer a reliable measure of the company's growth trajectory in the cybersecurity sector.

As a result of the positive report, Nvidia's stock is expected to open more than 1% higher, contributing to a broader market rally as all three U.S. stock benchmarks showed gains in premarket trading.