Apple will drive more upside in the broader stock market as positive momentum and supply chain improvements boost shares of the tech giant, Wall Street analysts say

• Apple is poised to drive the stock market higher as it benefits from a combination of favorable technicals and fundamentals.
• "If Apple is strong I don't think you can be bearish on the S&P 500" Fundstrat's Tom Lee said.
• Apple stock has positive short-term momentum and is showing no signs of upside exhaustion, according to Fairlead Strategies' Katie Stockton.

The S&P 500 is poised for more upside in the short-term, and it's likely to be driven by the largest company in the world: Apple.

That's according to Fundstrat's Tom Lee and Katie Stockton of Fairlead Strategies, who separately highlighted the favorable fundamentals and technicals of Apple stock this week.

Apple shares started 2022 off with a 18% decline as the broader stock market worried about interest rate hikes from the Federal Reserve, continued supply chain disruptions, and Russia's invasion of Ukraine. But since bottoming at the $150 level on March 14, Apple shares have rebounded 15% and recouped a good chunk of their losses.

If the uptrend in Apple continues, so should the ongoing recovery rally in the S&P 500. Stockton highlighted in a Thursday note that Apple notably outperformed the stock market on Wednesday and is showing no signs of upside exhaustion, adding that the stock has postive short-term momentum.

"Apple faces minor resistance near $175," she said, representing potential upside of at least 2% from current levels. But above that, it's likely Apple makes a run for its next resistance level at the record all-time-high of $182.63, representing further upside of 6% from the current price.

While the technicals look favorable for Apple, so do the fundamentals, according to Lee. In an interview with CNBC on Wednesday, he said, "It's a bellwether. It's a great company. And it's benefiting from supply chains easing. If Apple is strong I don't think you can be bearish on the S&P 500."

Lining up with those thoughts is the supply chain management muscle Apple was able to flex when it released a slew of new products earlier this month. Among them was a new budget 5G iPhone, which Wedbush analyst Dan Ives said will help power future earnings growth for the company.

And a rally in the largest stock in the world sets the S&P 500 up well for a continued move higher. "We expect a breakout next week to allow the relief rally to extend itself, noting upturns in our intermediate-term indicators. Short-term overbought conditions are not at extremes and breadth has room to expand," Stockton explained.