What does command eval "$(/opt/homebrew/bin/brew shellenv)" actually do?

Homebrew requires us to add eval $(/opt/homebrew/bin/brew shellenv) to ~/.zprofile. What does this actually evaluate to and what does this accomplish? I am a bit new to shell scripting. I know $var is used to refer to a variable named var but that's about it. What is the meaning of putting a path inside of $()? Also is shellenv an argument here and what does it signify?