How to Buy the Uber Dip With a Covered-Call Strategy

Peter Lynch, the iconic mutual fund manager of the 1980s and 1990s, was known for advising to invest in firms that an investor was intimately familiar with and used in their everyday life. His thesis projected that this was a good sign of mass consumer acceptance. Today, I am going to channel Lynch’s advice for this weekend’s covered-call trade.

Unlike most of the Generation Z and Millennial generations, this 60-year-old Gen Xer spends relatively little time on his iPhone. Mostly, I use it for texting, reading articles and checking my fantasy teams on NFL Sunday. No TikTok binging or obsessive Instagram watching for this old curmudgeon. I have very few apps on my smartphone. One that I do have is from Uber Technologies (UBER), which I use several times a week in Delray Beach, Florida.

This allows me to go sans car and all of the associated costs (monthly payment, insurance, gas, maintenance, etc.) of owning a vehicle. I can always rent a vehicle for long trips. I live in a walkable area of town, so this strategy is viable and getting increasingly desirable as parking prices in downtown have gotten to the point where they cost more than my roundtrip Uber ride.

This San Francisco based transportation platform has become a juggernaut in the space with over 200 million active users globally. It is responsible for nearly 4 billion passenger trips on a quarterly basis. Uber receives a cut (about 30%) of the gross booking charge for matching driver and passenger.   

The company also has a growing delivery business headlined by Uber Eats and this will be enhanced via the pending acquisition of Delivery Hero (DLVHF). Uber recently expanded its partnership with Costco (COST) nationwide. Only roughly 20% of customers that use Uber for rides also use it for delivery services.  That’s a big opportunity and that crossover should increase significantly over time.

The advent of driverless technology and autonomous vehicles represents both an opportunity for the company and also a potential competitive threat. Uber plans to invest about $10 billion in AV software partners and AV operators with about 120,000 robotaxi commitments over the next few years on this front. 

Concerns around the looming appearance of robotaxis and the potential integration challenges with Delivery Hero have knocked the stock down roughly 30% from its 52-week highs to around $70.00 a share, providing a solid entry point. Revenue growth should consistently clock in between the low- to mid-teens annually over the next half decade. The company’s CEO and COO have stepped in to buy the dip and made insider purchases. In addition, the company bought back $3.5 billion of its own stock in the first half of 2026. The leverage ratio of its balance sheet is under 1x. The median analyst firm price target on UBER is roughly $100.00 a share. Here is how I took my initial stake in my ride provider this week:

Option Strategy

Here is how one can initiate a position in UBER utilizing a covered-call strategy.

Selecting the March $65 call strikes, fashion a covered call order with a net debit in the $59.00 to $59.20 a share range (net stock price – option premium). This strategy provides downside protection of 17% over the trade’s duration. This strategy also provides 10% return potential, even if the stock trades down 7% over its option duration.

At the time of publication, Jensen was long UBER.