It's actually probably in about fourth place, after breast, breast, and breast. It is made by heat treating cow milk proteins to make them more digestible. Unprocessed whole milk forms large curds in the stomach that are very hard for baby to digest. That way baby gets a complete diet with all required vitamins and minerals. It's also a lot cheaper, and lighter to lug home from the grocery.
Soy formulas are also quite acceptable and nutritious.
The down side is that the stools may be even thicker or harder than with cow milk formula. Then there are special pre-digested hypoallergenic formulas discussed below, best recommended by your doctor. They are specifically for treatment of milk intolerance .