as for cpu performance issues, there ist a similar thread, basically switching the cpu from host to x86-64-v2-AES solves that.
you may want to check if this affects you as well
but as already stated, if you assign 2 vCores = 1 physical Core then the performance of your Windows Server 2025 VM will be bad
I had a similar issue with server 2025 where balloon service is not installed by guest agents for some reason automatically.
I discovered this because on proxmox on the vm under monitor if I typed "info balloon" it gave only basic info. I checked and the service was missing on the server.
I could install it from the iso manually with "blnsvr.exe -i" and it started right up and fixed ballooning right away. All normal now. (make sure you copy the files to the c: before installing service).
