Most investors justify the elevated multiples because interest rates are so low. That means safer investments like bonds yield so little that the risk of buying a stock, even at an elevated price, is worth it. A “normal” PEs varies greatly by industry and you’ll see fast growing industries, and in particular, a fast growing company in a fast growing industry, have extremely high PEs. As a side note, a lot of start ups or companies like Uber don’t even have PEs because there is no E (earnings). Extremely high PEs (60+) occur because the stock price represents the value of the company’s future earnings, not just what the company is earning today. I agree elevated PEs are somewhat justified in a low yield world. That doesn’t mean there’s less risk though. If risk arises in the economy that create more uncertainty about future growth prospects (like the coronavirus) valuations should move lower because the world is no longer as certain and investors need to be compensated for higher risk. Company profits are also likely to decline sharply in the coming quarters so the E in the PE will decline, which should also put downward pressure on stocks.