Danske Bank analysts Anders Møller Lumholtz and Owen Callan agreed, stating that although rating moves often have limited market impact, they did expect Irish bonds to get some tailwind following the upgrade.
They added: "Going forward, we in particular expect increased interest from official money resulting in a broader investor base."
The rating upgrade comes against a background of improving economic indicators for Ireland. Third-quarter gross domestic product (GDP) beat expectations and expanded by 1.5 percent on the quarter, while growth for the second quarter was revised up from 0.4 percent to 1 percent.
"Despite Moody's hesitation, the Irish recovery has been well-accepted and understood in the market, which currently is pricing Irish sovereign bonds as BBBplus (or better)," Lumholtz and Callan added.
(Read more: Ireland's bailout exit feted by bond markets)
Rating agencies S&P and Fitch both have Ireland at BBB-plus – two notches higher than Moody's.
Another upgrade likely?
Investec's O'Sullivan said he was "optimistic, but not complacent," about Ireland outlook.
"It is continuing to punch above its weight in terms of attracting foreign investment and jobs, positioning it quite well to move ahead from here," he told CNBC.
"This will help cushion it from weakness elsewhere -- but Ireland is not immune to everything. It is a very small country, after all."
Despite this caution, however, Lumholtz and Callan said Moody's rating upgrade set the scene for more upgrades over the coming year.
"Growth has accelerated, Ireland is set to achieve a primary surplus in 2014, government debt has peaked and the large cash buffer at the NTMA (National Treasury Management Agency) implies that Ireland is prefunded to 2015," they said.
"The Irish government has so far delivered all the fiscal belt-tightening required by the (bailout) program. In short, another upgrade this year seems likely."
Moody's next credit rating review for Ireland is due on May, 16.