Edit: This question attracted way more interest than I hoped for! I will need some time to go through the comments in the next days, thanks for your efforts everyone. One thing I could grasp from the answers already - it seems to be complicated. There is no one fits all answer.
Under capitalism, it seems companies always need to grow bigger. Why can’t they just say, okay, we have 100 employees and produce a nice product for a specific market and that’s fine?
Or is this only a US megacorp thing where they need to grow to satisfy their shareholders?
Let’s ignore that most of the times the small companies get bought by the large ones.
You don’t need to argue anything, because there is no universal definition of capitalism. Were not trying to define it.
But the term itself requires capital to be involved, and for a business to exist, that capital needs to be reinvested in the business. That doesn’t require growth. The absolute minimal state simply requires pricing a good sold at a net profit. That’s all. Growth isn’t a requirement.