The Gunners were one of a few top clubs linked with a move for Neto during his first couple of seasons at Molineux, only for injuries to hamper his development.
However, the Portugal international has since consigned his fitness woes to the past with a scintillating start to the new season, registering one goal and four assists in his side's opening seven Premier League matches.
Neto has directly contributed to a goal in each of Wolves' last five Premier League games, registering four assists from three matches against Everton, Crystal Palace and Liverpool, subjecting Joe Gomez to a torrid Molineux afternoon against the latter.
The former Lazio and Braga man then opened his account for the season with a powerful strike into the roof of the net against Luton Town last weekend, before playing a crucial role in his side's memorable win over champions Manchester City on Saturday.
Picking up the ball in the middle of the pitch on the right-hand side, Neto burst away from Phil Foden and Nathan Ake before attempting to pick out a teammate, but Ruben Dias deflected the Portuguese's cutback into his own net.
Julian Alvarez's stunning free kick got the treble winners back on level terms, but Hwang Hee-chan prodded home the decisive goal in the second half, ending Man City's perfect start to the new season and leaving Arsenal just one point behind Pep Guardiola's side in the early-season rankings.
After doing the Gunners a huge favour in their early attempts to put pressure on the champions, The Mirror reports that Neto is still on Arsenal's transfer radar ahead of a possible winterRead on sportsmole.co.uk