AM stands for amplitude modulation. This means the intelligence in conveyed by varying the amplitude, one of the parameters of the radio wave.
People are most familiar with AM from radio broadcasting. AM technology is older than FM, and it doesn't sound as good, so fewer and fewer people use it.
It is a peculiar fact of conventional AM radio broadcasting, though, that at night the signals can travel great distances. To this day there are those who like to "DX" AM broadcast stations; that is, try to hear the most distant ones possible. The signals can travel thousands of miles at night, and on the Coasts it is usually possible to hear overseas broadcasts. In the southern U.S. reception of Mexican stations is quite common; and in the north, Canadian stations extend their range well into the Midwest.
Most people think of shortwave broadcasting as distinct from AM radio, but the difference lies in the frequencies used, not the method of modulation. The overwhelming majority of shortwave broadcasters use amplitude modulation to this day.
Strictly speaking SSB (used on shortwave for most voice communications) is a form of AM, but in practice they are very different things. The cheapest shortwave radios do not have provision for SSB reception, and for that reason should be avoided. Further discussion of AM vs. SSB reception is found on my pirate radio page.
In addition to AM and shortwave broadcasting, amplitude modulation is still used for CB radio, older cordless phones, and curiously, air traffic control.
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