Parallels on M1 only supports ARM versions of Windows, unfortunately.
[edit] From
here:
Supported Guest Operating Systems (Mac with Apple M1 chip):
Only ARM versions of operating systems are supported.
•Windows 11 on ARM (recommended)
-Additional information on the M1 experience may be found in this
article.
-Windows ARM can run most of the regular Windows x86 applications. You can download the Parallels Desktop trial and install the application of your interest. If it doesn't work, let us know at Parallels Forum.
•Ubuntu Linux 21.10, 21.04, 20.10, 20.04
•Fedora Workstation 35, 34, 33-1.2
•Debian GNU/Linux 11, 10.7
•Kali Linux 2021.3, 2021.2, 2021.1
•macOS Monterey 12 (in-app download)