The data stream flows from the previous node to the current. some sop nodes create their own data and also you can attach your own custom if you want.
for example, if you place a normal sop node after a geometry Houdini creates an attribute called N and assign it to vertex or point of the geometry and then you can use it to your needs. like for color or drive velocity with N.
also, each sop node recooks if the above nodes change. each node responsible to get input geometry and do some operation on it and generate a new one, and each sop node has its own local cache to speed up operations.
for more information refer to Houdini Masterclass "compiled SOPs" by Sidefx, jeff explain it in much more detail.