Morata has been out of favour at Chelsea this season and looks set to leave the club after 18 months in west London.
The Spain international was linked with Sevilla and AC Milan but it now appears Atletico Madrid are in pole position to secure his signature.
Chelsea are in the market for a striker themselves and head coach Maurizio Sarri says Morata will not be able to leave until a replacement is signed.
Sheth pointed out Morata could be replacing Diego Costa at Atletico, the man he was bought to replace at Chelsea two summers ago.
And he reckons because Morata is in talks with the Spanish club, Chelsea must be closing in on a signing of their own.
“This one is gathering momentum,” Sheth said on Sky Sports News.
“Sevilla and AC Milan were interested but it now seems Atletico Madrid are in the driving seat.
“Talks are ongoing over a return to the club where he actually started his youth career.
“The interesting point to make here is Morata actually joined Chelsea effectively replacing Diego Costa.
“Now Costa went to Atletico Madrid, this season he’s started just 11 La Liga games.
“So could it be that Morata could be a replacement for Diego Costa for a second time?
“Given Morata is in talks with Atletico Madrid, it would suggest a potential replacement is moving closer.
“If Sarri had his way, Chelsea would sign Gonzalo Higuain from AC Milan.”
Morata has scored 24 goals in his 72 appearances for Chelsea in all competitions.
Two of those goals came in his last outing – the 2-0 FA Cup third round win over Nottingham Forest earlier this month.