The Frenchman impressed in his first season after joining from Monaco and was a rare bright light in an otherwise underwhelming 2015-16 campaign for United.
He has struggled to build on that form this season, though, and has featured only sparingly under Jose Mourinho.
The 21-year-old's limited opportunities fuelled speculation he could move on, but United favourite Neville has urged the attacker – who scored one and set up the other in Saturday's 2-0 win over the Hornets – to step up and prove his worth.
"He did really well against Watford. It is a good start for him in terms of the rest of the season," Neville told Sky Sports.
"United have got a lot of games, he is going to get football and the fans love him.
"The manager has given him a chance. Go for it. It can be the best club in the world for you to play at and make you into a star. I think he has just got to recognise that.
"Martial has got to decide which way he wants to take it, as have a couple of others. What Jose Mourinho has decided to do is challenge these players and say 'are you good enough to play for this club? Have you got what it takes to go out there and deliver week in and week out?'.
"Martial is a huge signing in terms of money and is still very young. However, he is a massive, massive potential talent. He could be anything he wants to be.
"On Saturday there were so many things that he did well."