TAM matters because growth eventually meets arithmetic. A company at 40% growth with 3% market share has room; the same company at 35% share does not, and the market usually derates it long before growth actually slows.
Company-supplied TAM figures are marketing. Build your own from the bottom up: number of potential customers times realistic annual spend. The gap between the two numbers is often a factor of five.
Example: Northwind Cloud claims a $40B TAM for jobsite software. A bottom-up count of 1.1 million contractors at $3,600 a year gives $4.0B, against current revenue of $210M: still early, but not by the factor claimed.
Related: organic-growth, annual-recurring-revenue, revenue, guidance, discounted-cash-flow