Parallels announced support for macOS Monterey and Windows 11 in new update. If your development depends on these OSes, you can now use Parallels Desktop 17.1. It also supports Apple Silicon for macOS virtualization.
Microsoft made a comment on the future of ARM Windows on Apple Silicon Macs both on running natively and virtualized.
We asked Microsoft whether running Windows 11 on an M1 Mac in Parallels is supported, and were told it's an unsupported scenario. Running the OS directly on the hardware isn't supported, either.The Register
Parallels though still provides hints on how to run Windows on M1 Macs.