Scarcity Multiplier

By: Mike Ye x Ella (AI)

The Scarcity Multiplier is the coefficient that separates sPEG from an ordinary PEG ratio. sPEG divides forward P/E by growth multiplied by scarcity:

sPEG = Forward P/E ÷ (Growth Rate × Scarcity Multiplier)

Growth tells you how fast earnings are expected to rise. The Scarcity Multiplier tells you whether anything protects that growth. It is a proprietary exmxc coefficient built from five factors:

Irreplaceability: how essential and non-substitutable the asset or layer is.
Replication timeline: the capital and years a competitor would need to replicate it.
Supply concentration: how few players control the capacity.
Throughput control: how much the asset governs output across the whole system.
Demand durability: whether demand is structural and multi-year rather than a temporary pull.

A high multiplier pulls sPEG below PEG, surfacing controllers of constrained capacity that ordinary screens read as merely fairly priced. A low multiplier pushes sPEG above PEG, exposing companies whose growth is real but unprotected. The logic follows acquisition practice, where assets that control constrained capacity command disproportionate strategic value.

Within an index series, multipliers are held constant between updates, so changes in sPEG reflect price, earnings and growth rather than a re-scoring of scarcity. The same multiplier logic is applied beyond infrastructure: the sPEG Product Scarcity Index scores AI-native products on how irreplaceable the knowledge behind them is.