SVM is a supervised machine learning algorithm that can be used for classification or regression. It works by finding the optimal hyperplane that separates classes by the largest margin. SVM identifies the hyperplane that results in the largest fractional distance between data points of separate classes. It can perform nonlinear classification using kernel tricks to transform data into higher dimensional space. SVM is effective for high dimensional data, uses a subset of training points, and works well when there is a clear margin of separation between classes, though it does not directly provide probability estimates. It has applications in text categorization, image classification, and other domains.