Vertical scaling means upgrading the machine you already have. You take your single server and give it more CPU cores, more RAM, a faster disk, or a faster network card. The application keeps running on one machine — it just becomes a more powerful machine.
Real-world analogy: Imagine you run a small restaurant kitchen with one chef. Business picks up, so instead of hiring more chefs, you send your existing chef to culinary school, buy them better knives, and install a bigger stove. The chef is now faster and more capable — but there is still only one chef.