Anchor text
Anchor text is the clickable words of a link. Search engines read it as a short description of the page the link points to.
Anchor text is the clickable words of a link, the part that's usually blue and underlined. If a sentence ends with a link on the words "grinder guide" then those two words are the anchor text. Readers use it to decide whether to click, and search engines use it as a short description of the page at the other end.
It's the same thing as link text. SEO people mostly say anchor text, and they mostly mean the words other sites use when they link to you.
The kinds of anchor text
When you look at the links pointing to your site, the anchors fall into a few groups. Some are your brand name, such as Fernhill Coffee. Some are the bare address. Some describe the page, such as a link on the words "guide to cold brew ratios" in a sentence about brewing. Some say nothing at all, like "here" or "this site" at the end of a sentence. A natural set of links has a mix of all of them, mostly your name.
Google's link best practices ask for anchor text that's descriptive, short and relevant to the page it links to.
When anchor text looks bought
If most of the links to a page use the same keyword phrase, that's a sign someone arranged them. Google's spam policies list guest posts and advertorials with keyword-rich anchor text as link spam.
For example, Kestrel Roasters finds that 60 of the 80 links to its subscription page use the words "best coffee subscription UK" and come from blogs it has never heard of. An agency it hired years ago placed them. Those links are more likely to hurt than help.
Anchor text and AI answers
An AI platform that reads a page takes in the whole sentence around a link, not just the anchor. So the words other sites use about you matter whether they link or not. A review that says "Fernhill's decaf is the smoothest we tried" gives an answer something to repeat. A link that says "click here" gives it nothing.