"The strong interest Barca seem to have in Lautaro could mean they have to give up on the signing of Neymar," Rivaldo told Betfair. "Because it's impossible to sign them both at the same time.
"The club must focus on signing one of them. Either would be a great signing, but they have to assess the amounts and the wishes of [Quique] Setien. Ask him: 'which position do you really want to strengthen?'"
Rivaldo believes Suarez still has plenty to offer for the foreseeable future and sees that as a potential negative for Martinez, who has a €111 million release clause.
"If Barca sign Lautaro for around €100m, that would lead you to think he will arrive at Camp Nou to be a starter," he said.
"Unfortunately for him, Luis Suarez is still unquestionable and that could be a problem for Lautaro. Suarez has two or three years left at the highest level."
Meanwhile, Barca have had to cut player wages due to the effects of the coronavirus pandemic and Rivaldo said: "The current crisis has hurt clubs financially.
"Barcelona need to assess their situation and decide whether they have the sufficient economic potential [to make expensive signings this summer]."