Stir the panko and milk together in a large bowl. Let sit 1 minute until it forms a paste. Meanwhile, preheat the air fryer to 375°F for 3–5 minutes on the air fry setting.
Add the ground chicken, Parmesan, egg, olive oil, parsley, salt, garlic powder, Italian seasoning, onion powder, and black pepper to the soaked panko. Mix with your hands about 20 seconds, just until combined. Do not overmix.
With damp hands, scoop 1½ tablespoons per meatball and roll into 1-inch balls (about 20). Spray the air fryer basket with olive oil or line with perforated parchment. Arrange the meatballs in a single layer with space between them, working in batches if needed. Spritz the tops with olive oil.
Air fry 10–12 minutes, flipping halfway through. Begin checking at 10 minutes and remove as soon as the internal temperature reaches 165°F.
Rest 2–3 minutes before serving.