Analysts at Oppenheimer said in a note Monday that there is likely room for further broadening of this year’s rally.
Furthermore, the firm believes there is an "opportunity to see stocks further climb the proverbial wall of worry."
"Bears appear to remain in capitulation mode, nervous investors seem to be finding confidence to stay in stocks, and the leveraged crowd appears to be learning to accept the likelihood that the Fed has no intention of cutting rates soon with last week’s PCE deflator data for January showing inflation still sticky and the central bank’s inflation target rate still at some distance away," said analysts.
"In our view, much of the increase in sentiment and confidence which has sustained the current bull run is driven by fundamentals too strong to argue against that are reflected in economic data which continues to show resilience in business, consumer spending and jobs growth," they added.
The firm believes established technology companies whose products and services are deeply embedded in the lives of businesses and consumers are likely to prove to be key holdings, while energy likely has further upside.