The Gunners, alongside Premier League rivals Liverpool, have raised doubts about the Brazilian's suitability after an incident that cast a shadow over his otherwise impressive season.
The Gunners have endured a challenging Premier League campaign, trailing leaders Liverpool by 13 points with only six games remaining. Arne Slot's Reds have surged ahead, leaving Arsenal unable to capitalise on Manchester City's dip in form after two seasons as runners-up.
However, Arsenal have found solace in the Champions League, where they eliminated Real Madrid to reach the semi-finals, setting up a clash with Paris Saint-Germain.
Despite their European success, Arsenal's attacking options have drawn scrutiny. Injuries to Kai Havertz and Gabriel Jesus exposed a lack of depth upfront, with Mikel Merino admirably filling in as a makeshift striker.
The Gunners have identified a new centre-forward as a priority for the summer to elevate their ambitions.
Cunha, who has scored 14 goals and provided four assists in 27 Premier League appearances for Wolves this season, initially emerged as a prime target. A report from TBR Football earlier this month suggested Arsenal's new sporting director, Andrea Berta, had positioned them as frontrunners for the 25-year-old.
Yet, concerns over Cunha's conduct, particularly an incident during Wolves' match against Bournemouth, have prompted a rethink.
Graeme Bailey, TBR Football's chief correspondent, highlighted the issue, stating: "Cunha's actions this season, both on and off the pitch, especially in that Bournemouth game, have raised red flags for Arsenal and Liverpool.
"Such behaviour in a high-profile club's shirt could lead to a lengthy ban. When you're investing over 60 million pounds in a player, those red flags are a significant concern."
While Arsenal and Liverpool have hesitated, Manchester United appear less deterred, potentially opening the door for a rival bid. Meanwhile, recent updates from Arsenal's camp indicate Mikel Arteta remains focused on squad discipline.
In a press conference following their Champions League triumph, Arteta emphasised the importance of "character and professionalism" in new signings, hinting at the club's cautious approach to recruitment.
Wolves, for their part, have publicly backed Cunha. Manager Gary O'Neil, speaking to the club's official website after a recent match, praised the forward's "passion and commitment," downplaying the Bournemouth incident as a "moment of frustration."
Cunha himself has remained silent on social media regarding the transfer speculation, focusing instead on his performances, including a brace in Wolves' 3-2 win over Tottenham last weekend.
As Arsenal weigh their options, the Cunha saga underscores their determination to balance talent with temperament in their quest for silverware.
Real Madrid have reportedly struck a strategic deal with Arsenal, securing priority access to star defender William Saliba should the Gunners ever decide to sell him before his contract expires in 2027.
Arsenal manager Mikel Arteta has expressed confidence that forward Kai Havertz could make a surprise return from injury before the end of the season, raising hopes that the German international may be available for their UEFA Champions League push.
Thibaut Courtois hit out at his Real Madrid teammates for "playing too individually" after they were dumped out of the Champions League by Arsenal.
Liverpool head coach Arne Slot has confirmed that Trent Alexander-Arnold could return to action this weekend in the Premier League fixture against Leicester City, following a lengthy spell on the sidelines due to an ankle injury.
