Stock market guru Jeremy Siegel, professor of finance at University of Pennsylvania, has regained his enthusiasm toward stocks, after wavering a bit during the September-October correction.

He told CNBC that the Dow Jones Industrial Average could reach 20,000 by the end of next year.

Since last year, Siegel has forecast the Dow would touch 18,000 by the end of this year. That would require a gain of 1.9 percent from current levels.

So what's going to move the needle? Economic growth of 3 to 4 percent, low inflation, falling gas prices and job growth could do it, he explained.

"There are a number of goods things that need to happen, but certainly that [20,000] would be even conservative for fair market value if we get some of these favorable trends coming together over this next year," Siegel stated.

"The 3 percent [GDP], that's the wild card." He noted that many economists predict growth of only 2 to 2.5 percent for the fourth quarter.

"I still think we are 10 percent undervalued given the interest rate structure," Siegel added.

And, "We have the momentum on our side going into 2015."

The Dow has rose close to its record high Tuesday, while the S&P 500 has hit a new peak, but not all investors are jubilant.

"People are happy the market is at all-time highs, but they are still nervous," Michael James, managing director of equity trading at Wedbush Securities, told Bloomberg. "Going into next year, will the market be able to maintain these gains and go higher given the cautiousness from Europe and Asia?"

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