(Reuters) -BofA Global Research has lifted its year-end target for the to 5,400, from 5,000 earlier, representing an upside of about 5% from current levels.

The brokerage has joined peers Barclays, UBS, and Goldman Sachs in predicting the index would finish the year in a range of 5,200 to 5,400.

U.S. stocks closed at record highs on Friday as technology stocks rallied on continued enthusiasm for artificial intelligence, with further support from declining Treasury yields.

BofA's revised target reflects its view that risk premium to equities is likely to be lower as expectation of higher and "more predictable" earnings have increased this year.

The index's debt having halved since 1980s, lower earnings-per-share (EPS) volatility, and a shift to asset-light companies also add to the bullish view, the brokerage said in a note dated Sunday.

"We see potential for improved margin stability from here as companies shift from global cost arbitrage and free capital-driven growth to efficiency/productivity," Savita Subramanian, BofA's chief U.S. equity strategist, said.

While themes such as AI, weight-loss drugs of GLP-1 category will continue to drive sentiments, the market would broaden beyond these, Subramanian said.

Meanwhile, passive inflows could continue to drive momentum in U.S. mega-cap stocks, she said.

A 5% pullback in the market is seen as likely in 2024, as such moves have historically have occurred thrice every year, while 10% corrections occur once per year, according to the strategist.

The market could see a year-end rally, once uncertainty surrounding the outcome of presidential elections is removed, she said.