NEW YORK (TheStreet) -- This afternoon, after the market close, Intel (INTC) will report second-quarter earnings. As has been the case for some time, most people will ignore the big picture and focus on yet another quarterly performance. It's the peril of Wall Street's quarter-to-quarter obsession with growth.

That's the wrong approach. Intel is a big-picture company, and investors need to remember that.

The stock closed Monday at $31.49, less than 1% away from a new 52-week high. The stock touched that high in trading Tuesday, up to the 52-week high-water mark of $31.72. Intel shares are up 22% on the year to date, beating both the tech sector and the semiconductor industry's 9% gain.

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Intel will also benefit from a boost in gross margin, which is expected to reach the midpoint of its range, around 64%. This is a 1% increase from prior expectations. At the same time, management said full-year gross margin is now projected to fall in the upper half of the previous range, about 61%. Intel cited "expected improvements in unit cost and volume" to explain the change.

Intel's results will tell us that there is indeed a rebound in PC shipments. But we've known this for two months. Intel itself already gave us this nugget.

What I think is more important, however, is that Intel has become less reliant on both its current chip business and -- even more important -- a stabilizing PC industry. While Intel did raise forward guidance on a rebound in PC shipments, that's no reason to get excited.

What will be ignored this afternoon is that Intel management has bigger ambitions. Just like Google (GOOGL) has become synonymous with search, Intel wants to dominate the Internet of Things. That's become a popular buzzword that many companies throw around, but only a few understand.

Intel plans to demystify everything about this concept, which refers to objects and devices that link to the Internet. Intel is making significant capital investments, including its acquisition of Basis Science, a company that specializes in wearable device technologies for health and wellness applications.

The company is also focusing on other objects like door locks and thermostats, which can be uniquely identified and controlled via the Internet. There's also a new wave of medical devices with considerable safety tracking features.

Apple's (AAPL) highly anticipated iWatch, which analysts believe will sell 60 million units in its first year, is expanding this market. As smartphones and tablets begin to plateau, I expect the Internet of Things market to branch off that market to create the next growth area of tech.

Like many other companies, Intel knows that the Internet of Things is where the puck will land next. Both Apple and Google want to dominate the smart home. Google's acquisition of Nest and Appel's HomeKit are the latest sings of how big their ambitions are. But they can't do it alone.

They will need a company like Intel that has both the R&D resources and chip experience to bring to life a toaster, a refrigerator, a fitness monitor, and devices yet to be imagined. You want a text that tells you when the left side of your bagel is too crispy, right? Or how about one that notifies you of when to pour the next ingredient in your blender? Intel can do that.

This afternoon's results, however, won't show that. They will be only window-dressing for what's coming ahead. Buying the stock is about next year and beyond.

At the time of publication, the author was log AAPL.

This article represents the opinion of a contributor and not necessarily that of TheStreet or its editorial staff.

TheStreet Ratings team rates INTEL CORP as a Buy with a ratings score of B+. TheStreet Ratings Team has this to say about their recommendation:

"We rate INTEL CORP (INTC) a BUY. This is driven by some important positives, which we believe should have a greater impact than any weaknesses, and should give investors a better performance opportunity than most stocks we cover. The company's strengths can be seen in multiple areas, such as its revenue growth, largely solid financial position with reasonable debt levels by most measures, reasonable valuation levels, solid stock price performance and expanding profit margins. We feel these strengths outweigh the fact that the company has had sub par growth in net income."

Highlights from the analysis by TheStreet Ratings Team goes as follows:

  • Compared to its closing price of one year ago, INTC's share price has jumped by 34.45%, exceeding the performance of the broader market during that same time frame. Regarding the stock's future course, although almost any stock can fall in a broad market decline, INTC should continue to move higher despite the fact that it has already enjoyed a very nice gain in the past year.
  • Despite its growing revenue, the company underperformed as compared with the industry average of 2.9%. Since the same quarter one year prior, revenues slightly increased by 1.5%. This growth in revenue does not appear to have trickled down to the company's bottom line, displayed by a decline in earnings per share.
  • INTC's debt-to-equity ratio is very low at 0.23 and is currently below that of the industry average, implying that there has been very successful management of debt levels. To add to this, INTC has a quick ratio of 1.68, which demonstrates the ability of the company to cover short-term liquidity needs.
  • The gross profit margin for INTEL CORP is currently very high, coming in at 74.80%. It has increased from the same quarter the previous year. Regardless of the strong results of the gross profit margin, the net profit margin of 15.12% trails the industry average.

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