Around a month ago, Parallels announced that its Desktop 17 software supports running Windows 11 on both Intel and M1 Macs. However, users would only be able to emulate the Windows on ARM variant of the OS. It is important to note that in order to get Windows on ARM up and running on virtualization software like Parallels, you have to grab and utilize a virtual hard disk file from a Windows Insider Preview build, as noted by XDA.
That said, in a statement issued to The Register recently, a Microsoft spokesperson has confirmed that running Windows 11 on M1 Mac devices isn't a "supported scenario". What this means is that while you can install the OS via Parallels on an M1 Mac, if you run into any issue, Microsoft isn't responsible for providing a workaround or a fix. Furthermore, if at any point in the future, Microsoft makes changes to the OS that renders this virtualization impossible, people who paid for software like Parallels Desktop will be left out in te cold.
It is important to understand the importance of this caveat as a Windows 11 Dev Channel build recently starting throwing errors related to hardware compatibility on M1 Macs, and although Parallels was able to update its software to resolve the issue, there might be a future scenario where a quick fix is not possible. Interestingly, Thurrott does say that a source told him that Windows on ARM for M1 Macs would be officially supported by Microsoft in September. However, this seems to be very unlikely to happen now, in light of the recent statement.