Anchor Text is clickable and visible text inside the hyperlink. It is mostly underlined and blue such as this link to the homepage.
<a href="http://www.example.com">Example Anchor Text</a>Example Anchor Text
In this above html code, "Example Anchor Text" is visible with hyperlinked to https://www.example.com.
Anchor text provides the contextual information about the content of the link’s destination such as in the above example, “Example Anchor Text” should provide information about the content of example.com to user and search engines.
The external anchor text helps search engines to figure out how the world view the linked page. According to Google, website admins can’t control how other websites are linking to their content but they can make sure that the internal anchor text you use is useful and relevant.
So if a large number of websites link to a particular page for a given set of keywords, that page will rank well even if the page doesn’t have that keyword.