On April 13, data storage and analytics company Snowflake (SNOW 0.19%) announced a new product that it's calling the Manufacturing Data Cloud. This product takes Snowflake's expertise and uses it to address things like supply chain management and smart manufacturing -- both identified as big growth trends.

In this article, we'll look at what exactly Snowflake is trying to do. We'll also look at what it means for Snowflake investors.

What is Snowflake's new product?

Snowflake came to the public markets saying it was a cloud data platform. It wanted companies to have a place to store, share, and derive insights from enterprise data.

However, Snowflake has tweaked how it talks about itself over time. Now management says it's an applications platform. It's focused attention on enabling the proliferation of applications on its platform so that enterprises can find more use cases for their datasets. And by making this tweak, Snowflake's addressable market jumped from $81 billion to an estimated $248 billion.

Snowflake has a usage-based business model. As its customers use the platform more, they spend more. By focusing on applications, management hopes to increase usage. Ultimately, the launch of the Manufacturing Data Cloud appears to be about increasing platform usage as well.

Consider that Snowflake is launching its Manufacturing Data Cloud with 50 manufacturing partners, including big names like Honeywell and Carrier. These are existing Snowflake customers already trying to leverage the power of enterprise data. But now, Snowflake is launching this product with custom-made tools for the specific needs of these industrial companies.

Supply chain management and manufacturing are both becoming more data-driven. According to MarketsandMarkets Research, the supply chain management market could grow at a 9.4% compound annual growth rate (CAGR) through 2027, reaching $45 billion. Even better, the global smart manufacturing market (which accounts for more automation in manufacturing, among other things) could grow at a 14.9% CAGR through 2030 and surpass $250 billion, according to Grand View Research.

Two people looking at data on a computer in a warehouse.

Image source: Getty Images.

These industries represent big secular growth trends and require solutions for enterprise data. Therefore, companies in these spaces that want to become more data-driven may consider Snowflake's platform. After all, it already has applications built upon the data of its 50 manufacturing launch partners.

Is Snowflake stock a buy?

In fiscal 2029, which ends in January 2029, Snowflake expects to generate product revenue of $10 billion compared to the $1.9 billion in product revenue it generated in its fiscal 2023. This implies an incredible 32% revenue CAGR over six years.

With a market capitalization of $46 billion, Snowflake stock already trades at 4.6 times its projected revenue six years from now, which I believe is expensive. Therefore, I personally wouldn't buy Snowflake stock today, because I believe it's overvalued. However, others would disagree with me, citing the company's exceptional growth and robust profit margins -- its free cash flow margin was 24% in fiscal 2023. And these points are well taken.

Whether you believe Snowflake stock is overvalued or not, both bulls and bears can agree that the company will need to put up exceptional growth throughout the coming decade. For this reason, the Manufacturing Data Cloud is an important announcement, in my opinion.

You see, it's not enough to just have a good product. Potential customers need to understand how the product can help their business. Increasingly, I'm seeing this as a focus for Snowflake -- it's trying to build applications that solve real problems, and it's trying to make sure its customers grasp how to use what's been built.

Focusing on solutions for supply chain logistics and manufacturing is a smart move for Snowflake, considering they're growth markets. Launching with big-name partners could help the new platform gain traction quickly.

Investors can debate whether or not Snowflake stock is overvalued today. But either way, I believe the launch of its Manufacturing Data Cloud platform will help support its long-term revenue growth. That's an important component of the bullish investment thesis.