The stem is the curved edge stretching from the keel below, up to the gunwale of the boat. It is part of the physical structure of a wooden boat or ship that gives it strength at the critical section of the structure, bringing together the port and starboard side planks of the hull.
There are two styles of stems: plumb and raked. When the stem comes up from the water, if it is perpendicular to the waterline it is "plumb". If it is inclined at an angle to the waterline it is "raked". (For example, "The hull is single decked and characterized by a plumb stem, full bows, straight keel, moderate deadrise, and an easy turn of bilge.")
Because the stem is very sturdy, the top end of it may have something attached, either ornamental or functional in nature. On smaller vessels, this might be a simple wood carving (ornamental) or cleat (functional). On large wooden ships, figureheads can be attached to the upper end of the stem.