Elements absorb light at certain frequencies. Given a spectral analysis of the light that passes through the atmosphere and another of the light that doesn't pass through the atmosphere, you can take the difference and see what frequencies were absorbed by the atmosphere. This tells you what elements make up the atmosphere. The H2O sections in the graph are the light frequencies that are absorbed by water molecules ("amount of light blocked" on the Y axis), indicating that the atmosphere contains water.

More here: https://en.wikipedia.org/wiki/Absorption_spectroscopy

Much more about this particular graph here: https://www.nasa.gov/image-feature/goddard/2022/nasa-s-webb-...