What Is Total Addressable Market?

By Catherine Brock – Updated Jun 16, 2025 at 12:19 PM

Key Points

TAM is a revenue potential estimate if a company captured 100% market share.
The U.S. market for a product targeting green-eyed people could reach $33.6M (SAM).
Nvidia aims to maintain a significant share in the growing $300B AI chip market.

Total addressable market (TAM) is a measure of business potential often mentioned in business plans and pitch decks. When used on its own, TAM's main purpose in this context is to impress prospective investors and lenders.

Even so, total addressable market can -- or should be -- an actionable value for business decision-makers. Let's examine what TAM is and the role it plays in strategic growth plans. We'll also cover methods for calculating TAM and provide a TAM example from AI chip designer Nvidia (NVDA -0.49%).

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About the Author

Catherine grew up in Southern California wearing a lot of black and trying to perfect the art of sarcasm. Prior to joining The Fool as a contract writer, Catherine was climbing the corporate ladder in marketing roles and dabbling in too many side hustles. When she's not writing, she can be found riding a horse in the country or shopping online for clothes.

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Catherine Brock has no position in any of the stocks mentioned. The Motley Fool has positions in and recommends Nvidia. The Motley Fool has a disclosure policy.