EDIT: I think we misunderstood each other, sorry about that! You were referring to 1 external display, I was referring to 2 being the limit of the Pro Apple CPUs.
Yeah, the M1 can do one external + the built in (so two)
The M1 Pro can do two external, the M1 Max can do four (three at a higher resolution, one at a lower).
I have a Max with five displays total (including the internal). I suspect with some trickery I could get more than five (some external adapters allow two displays to appear as one larger/higher resolution one. But 34,216,704 pixels should be enough for anyone ;)
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This says otherwise: https://support.apple.com/kb/SP858?locale=en_US
M1 Pro: 2 external displays. M1 Ultra: 3 external displays.
https://support.apple.com/en-us/HT213503