Azure IaaS service for creating Windows or Linux virtual machines on demand. The customer chooses the size (vCPU and memory), image, disks and networking, and manages the operating system, applications and data.
In AZ-900 it is the classic IaaS example: Microsoft manages the hardware and hypervisor, and the customer manages the operating system and everything running on it. AZ-104 asks about sizes, disks, Availability Sets, Availability Zones and Scale Sets. In AZ-305: choose VMs when you need full control of the operating system or want to migrate without changes (lift-and-shift).
Azure Virtual Machines is a concept that can show up on the exam. Check the full guide to see it in context.