Total Addressable Market, or TAM, is the total revenue opportunity available if a company captured 100% of the market for its product, used as a rough ceiling on how large a business could theoretically become.
TAM is often broken down alongside SAM (serviceable addressable market, the portion actually reachable given the company's specific product and go-to-market) and SOM (serviceable obtainable market, the realistic share achievable in the near term), since the full TAM number alone rarely reflects what's actually winnable in practice.
Investors read TAM skeptically by default, since it's easy to inflate by defining the market too broadly. A credible TAM estimate is usually built bottom-up, from a real, verifiable number of potential customers multiplied by a realistic price, rather than top-down from a large industry report that only loosely applies to what the company actually sells.
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