At the low end, sure. At the medium-to-high end, each VM is bound to one or more physical cores of the host, or sometimes an entire host ("dedicated instances.")
I don't know enough about the IaaS market to know what the relative revenues of low-end compute vs. medium-to-high-end compute are for your average vendor, though. Is most of the profit in the low end?
I'm also curious on what the impact on margins would be if IaaS vendors decided to switch away from serving the low-end compute demand with "a few expensive high-power Intel cores per board, each multitasking many vCPUs", to serving the demand with "tons of cheap low-power ARM cores per board (per die?) with each core bound to one vCPU."
