Text between backticks is executed and replaced by the output of the command (minus the trailing newline characters, and beware that shell behaviors vary when there are NUL characters in the output). That is called command substitution because it is substituted with the output of the command.
A=`cat /etc/p2ass2wd2 | head -n1` echo "$A"
A=$(cat /etc/p2ass2wd2 | head -n1) echo "$A"
References
https://unix.stackexchange.com/questions/48392/understanding-backtick
https://unix.stackexchange.com/questions/147420/what-is-in-a-command