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.
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.
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.