In a recent development, Goldman Sachs Group Inc. has raised its forecast for the S&P 500 Index to 5,200 by the end of this year, following the stock market's surge past the 5,000 milestone. This marks the second time the firm has boosted its forecast, increasing it by about 2% from the previous prediction of 5,100 made in mid-December. The new target represents a 3.9% jump from Friday's close and stands as one of the highest on Wall Street.

Goldman Sachs' strategist upgraded their earnings-per-share forecast for the year to $241 and $256 in 2025, expecting stronger economic growth and higher profits for the information technology and communication-services sectors. The firm anticipates that earnings growth will be the primary driver of upside potential this year, with valuation multiples for both the S&P 500 and its equal-weight counterparts remaining similar to current levels.

The recent market momentum has been fueled by expectations of a dovish policy shift by the Federal Reserve and growing optimism in artificial intelligence, particularly benefiting technology stocks. The S&P 500 Index has risen by 4.9% this year, with profits in the 500-member gauge projected to grow by 8.8% in 2024 compared to the previous year.

Wall Street peers, including Bank of America Corp., have indicated the possibility of raising their year-end targets, suggesting that investors may not be optimistic enough. The median S&P 500 target by several equity strategists tracked by Bloomberg currently sits at 4,950 through mid-January.

With various predictions and outlooks shaping the market sentiments, investors are closely watching for further developments as the year progresses.