Newcastle are in the midst of a six-game losing streak and hover just seven points above the drop zone following Sunday's 3-1 home loss to Tottenham.
Off the pitch, fans protested Mike Ashley's ownership of Newcastle outside St James' Park prior to kick-off over the weekend, which resulted in the club's lowest attendance of the season.
There are expected to be more protests before the end of the campaign, with supporters fed up with Ashley, but Shepherd, who left the club in 2007, called for fans not to boycott the team.
"I'm really worried, but I think a boycott's not going to be the answer. I don't think it helps anybody," Shepherd told Sky Sports News HQ.
"We need to get behind John Carver and the team. Doing a boycott isn't going to help that team.
"They're lacking confidence and they need every supporter behind them."
Fans want to see Ashley invest in better players, having recouped substantial profits following the sales of Demba Ba, Yohan Cabaye, Mathieu Debuchy and Mapou Yanga-Mbiwa, without reinvesting the money adequately.
But Shepherd believes there will be significant changes next term.
"He'll [Ashley] not want his assets to depreciate, so I'm confident he's going to come out in the summer and spend some money and get some players in," Shepherd added.
"Mike Ashley's a very clever guy. There's no doubt about it - he's a great businessman, so he knows what he's doing."
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