Originally Posted by A guide that really needs to be updated
Combo Bonus and Combo Decay
I'm sure you've noticed, but, in stages, multiple hits while the opponent is in midair grants a "bonus" to your damage, an extra 20% per hit, starting on the third midair hit and increasing until the tenth. This will go to a maximum of about 360%, or 3.6x the damage you would do if the opponent was on the ground. However, in PvP, it is the direct opposite. Multiple hits midair will actually cause your damage to drop, or "decay" to about 20% of its original damage. Generally, you'd want your hardest hits first
History stages seem to have a higher cap (if there is one at all), but it still holds generally true.
... and john even has this section copypasta'd in his guide (the OP of the thread).