The Reds put five past struggling Premier League outfit West Ham United in the third round of the FA Cup on Sunday, with the floodgates finally opening at the City Ground.
Forest have been bossing Championship fixtures for a number of weeks but have been left frustrated by their inability to make the most of the chances they create and kill teams off.
Davies intends to address that issue in January, with positive discussions having been held with his board when it comes to the pursuit of a proven marksman.
He said in the Nottingham Evening Post: "I think we all know if we look at the squad at the moment, it would be nice for us to add some firepower.
"I have spoken to the chairman and we both agree that adding some firepower to this team, which is still developing, is important.
"Our average age last week was 23.6 years of age. It is a young squad we have here and a developing team. The chairman and I both know we need to add firepower, for what is a long season."
While plenty of effort is being put into the search for striking talent, Davies is also aware of the need to keep things tight at the back.
A permanent deal for Jack Hobbs, who is on a season-long loan from Hull City, has been mooted, with the centre-half reported to be attracting interest from elsewhere as he enters a period in which he can be recalled to the KC Stadium.
Davies added on possible transfer talks: "That is up for the people at the club to sort out. I do not know the details, but the two clubs will obviously start chatting.
"But the player does not want to leave, he is not interested in leaving, he is very happy at the club. He is enjoying his time here.
"We have a player who is very happy, we have a player who wants to stay. We will let the two clubs resolve the situation, to do whatever needs to be done."