The 21-year-old has shone for Eintracht Frankfurt, on loan from the Portuguese club, and the Bundesliga side have agreed a deal for the Serb to stay permanently.
But Jovic's form - which has seen him score 25 times in 42 appearances this terms - means Frankfurt could look to sell him on at a profit in the summer transfer window.
Barcelona and Real have been linked with Jovic, while Jürgen Klopp's Liverpool are also believed to be keen, but it's the European champions who look to be in pole position to nab the striker.
Amid the speculation over Jovic's future, Frankfurt director Freddy Bobic told ZDF: "There's a real possibility that Jovic signs for Real Madrid.