This week brought yet another push-pull to the markets as investors attempt to figure out whether Lucy is going to pull the football away from Charlie Brown again in the China trade talks, but the narrative that struck me as most interesting on the week was the line that was drawn in the economy by the difference between earnings results at Texas Instruments (TXN) and at Intel (INTC).

Prepare for me to wildly oversimplify here, and leap to some conclusions, but the basic sense I got was that Texas Instruments, which has thousands of customers but is largely seen as a chip supplier to the industrial world, is seeing sales disappoint as the trade war cuts into demand… but Intel, which is also pretty diversified but is widely seen as a higher-end tech supplier with chips going into laptops and, probably most importantly, servers for data centers, had a record quarter and is still unable to even meet demand. The oversimplification is, “industrials bad, data centers good.”

Which immediately makes one think of the other companies who are benefitting from data center spending — there are lots, but for me it’s particularly NVIDIA (NVDA) and Arista Networks (ANET) and AMD (AMD) that come to mind (I own the first two, not AMD)…

… but then you look into the numbers a little bit and begin to wonder if this is really a recovery in data center and big cloud-company spending, or if it’s just that Intel had a good quarter. Microsoft (MSFT), giving a different signal on data center spending, reported lower capital expenditures in the quarter and guided investors to expect that capex would fall still further in the fourth quarter, which is bad news for Arista because Microsoft is their largest customer (and a reduction in orders from a couple major customers, likely Microsoft was one, played a major role in Arista’s disappointing Spring).

I don’t really know if we’re going to get the “data center spend recovery” in the second half that we had expected, but if I had only seen the Intel report and not Microsoft’s report, I’d be buying more Arista hand over fist right here… Microsoft gives me pause with their talk about lower infrastructure investment, but their Azure cloud service is also growing at 60% so I wonder how long it will take before they absorb their excess capacity and have ...