At $40M ARR, I assume the founders don't really need to make more money and are not in a rush to sell. Therefore, the price would go even higher. This can't be compared with investment where the founders still retain the control.
Cursor is probably the fastest growing company in the history of our modern civilization. Achieving a really high multiple doesn't seem out of line.
I'm skeptical of Cursor but I can see why they achieve that high valuation.