Dec. 22 at 8:56 PM
Trivariate Research identified 22 large U.S. stocks whose price-to-earnings (P/E) ratios exceeded 40 times for the first time in 2025, including Broadcom, Circle Internet Group, and Oracle. Historically, stocks crossing this threshold have underperformed the market by an average of 12 percentage points over the following three years, signaling potential overvaluation risk.
Despite strong earnings, some of these companies are already showing signs of stress. Broadcom, for example, rose nearly 50% year-to-date and crossed the 40x P/E mark in November, but then fell 18% over three days, reflecting market sensitivity to expectations around its AI chip business. Other tech names hitting this level include Tower Semiconductor, MACOM, Ciena, SailPoint, and Pure Storage, while industrials such as Curtiss-Wright and Karman Holdings also made the list.
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