CAPM states that

$1.$ Market portfolio is going to be the ONLY mean variance efficient portfolio for risky assets

$2.$ Market portfolio achieves the highest sharpe ratio.

$3.$ People look for high sharpe ratio asset. In equilibrium, they will all end up choosing a risky asset portfolio that is the tangency portfolio on the mean variance frontier for risky assets. Since everyone chooses the tangency portfolio, that portfolio becomes the market portfolio.

$4.$ The weight of stocks in the market portfolio is value weighted.

$1$

$12$

$123$

$1234$