Two, but only with the lid closed.
Two, but only if you close the laptop lid.
Here’s how it works: With the lid open, the M3 MacBook Air supports a single external display up to 6K at 60Hz. But if you close the lid and use it in clamshell mode, you can run two external displays — one up to 6K at 60Hz and another up to 5K at 60Hz. This is a quirk of the M3 chip’s display engine; it can only drive three displays total (including the built-in screen), so when the built-in is on, you lose one external slot. When the built-in is off, you get both external ports active.
So if you want a dual-monitor setup with an M3 Air, you need to keep the laptop closed and use an external keyboard and mouse. Third-party adapters and DisplayLink docks can sometimes work around this, but they add latency and software overhead. Native support is cleaner.
If you need three external displays simultaneously without hacks, step up to a MacBook Pro with an M3 Pro or Max chip.