It depends on what you plan on running and how much RAM each VM would potentially need. I run proxmox on my 11th gen NUC with 64GB of RAM, 8 VMs, 1TB nvme for VMs, and 500GB SSD for OS. I have had no problems for my workloads and have a bit more room for more.
Lemmy does seem to have enough content and user engagement for my needs. I’ve noticed engagement going up the past month but wasn’t sure I was making that up in my head.
I really haven’t felt the need to go back to reddit much. But the niche communities could use a lot more users posting and creating new content.