However, they face competition from Inter Milan, Manchester City and Arsenal for a player aware that his stock has risen sharply after an impressive loan season at Cagliari.
The 21-year-old made 34 Serie A appearances for Cagliari this season, contributing four assists from right-back, and earned a place in Italy's squad for warm-up fixtures ahead of the World Cup. Atalanta are open to selling — having been inundated with enquiries — and Palestra himself has signalled he is ready to take the next step in his career.
"I've always felt ready," Palestra said from Italy's training camp. "I want to thank Cagliari and the coach Pisacane for my first season as a starter in Serie A.
"Now I'm focused on these two games and starting over with Italy. For next season, I hope to grow and improve even more, to fight for even higher goals."
Newcastle United's interest is shaped by necessity as much as ambition. Kieran Trippier, who could play on either flank, was allowed to leave when his contract expired and has since agreed to join Wolverhampton Wanderers.
The club are also bracing for potential interest in Tino Livramento, whose contract has two years remaining — Arsenal and City had both shown interest, though City's is understood to have cooled.
Without Champions League football, Newcastle acknowledge the difficulty in competing with Inter Milan for Palestra's signature. Inter are motivated to sign the 21-year-old as a replacement if they sell Denzel Dumfries — a situation that could accelerate given Liverpool's interest. Both clubs have formally asked about Palestra in recent weeks.
Atalanta have valued Palestra at around €20 million. Their willingness to discuss a sale makes the situation live, and Newcastle's head start in the race reflects the groundwork done before the window opens.