diff --git a/common/changes/@rushstack/package-extractor/enhance-package-extractor-collect-folders_2026-04-08-23-56.json b/common/changes/@rushstack/package-extractor/enhance-package-extractor-collect-folders_2026-04-08-23-56.json
new file mode 100644
index 00000000000..4cd9425aef0
--- /dev/null
+++ b/common/changes/@rushstack/package-extractor/enhance-package-extractor-collect-folders_2026-04-08-23-56.json
@@ -0,0 +1,10 @@
+{
+  "changes": [
+    {
+      "packageName": "@rushstack/package-extractor",
+      "comment": "Update _collectFoldersAsync to process all starting folders in a single shared queue instead of serially. Add pnpmNodeModulesHoistingEnabled option to IExtractorSubspace to skip virtual store hoisting lookup when hoisting is disabled.",
+      "type": "minor"
+    }
+  ],
+  "packageName": "@rushstack/package-extractor"
+}
diff --git a/common/reviews/api/package-extractor.api.md b/common/reviews/api/package-extractor.api.md
index f0503a30d4f..1b0cfb0139c 100644
--- a/common/reviews/api/package-extractor.api.md
+++ b/common/reviews/api/package-extractor.api.md
@@ -58,6 +58,7 @@ export interface IExtractorProjectConfiguration {
 // @public
 export interface IExtractorSubspace {
     pnpmInstallFolder?: string;
+    pnpmNodeModulesHoistingEnabled?: boolean;
     subspaceName: string;
     transformPackageJson?: (packageJson: IPackageJson) => IPackageJson;
 }
diff --git a/libraries/package-extractor/src/PackageExtractor.ts b/libraries/package-extractor/src/PackageExtractor.ts
index 1e7c3602111..c2f4c790f7f 100644
--- a/libraries/package-extractor/src/PackageExtractor.ts
+++ b/libraries/package-extractor/src/PackageExtractor.ts
@@ -108,6 +108,12 @@ export interface IExtractorSubspace {
    * transform the package.json prior to extraction.
    */
   transformPackageJson?: (packageJson: IPackageJson) => IPackageJson;
+  /**
+   * Whether PNPM hoisting is enabled for this subspace. When set to `false`,
+   * the extractor will skip looking for hoisted packages in the PNPM virtual store, since no
+   * hoisting symlinks will exist. Default is `true`.
+   */
+  pnpmNodeModulesHoistingEnabled?: boolean;
 }
 
 interface IExtractorState {
@@ -489,10 +495,12 @@ export class PackageExtractor {
       }
     }
 
+    const startingFolders: string[] = [];
     for (const { projectName, projectFolder } of includedProjectsSet) {
       terminal.writeLine(Colorize.cyan(`Analyzing project: ${projectName}`));
-      await this._collectFoldersAsync(projectFolder, options, state);
+      startingFolders.push(projectFolder);
     }
+    await this._collectFoldersAsync(startingFolders, options, state);
 
     if (!createArchiveOnly) {
       terminal.writeLine(`Copying folders to target folder "${targetRootFolder}"`);
@@ -524,14 +532,14 @@ export class PackageExtractor {
    * Recursively crawl the node_modules dependencies and collect the result in IExtractorState.foldersToCopy.
    */
   private async _collectFoldersAsync(
-    packageJsonFolder: string,
+    packageJsonFolders: string[],
     options: IExtractorOptions,
     state: IExtractorState
   ): Promise<void> {
     const { terminal, subspaces } = options;
     const { projectConfigurationsByPath } = state;
 
-    const packageJsonFolderPathQueue: AsyncQueue<string> = new AsyncQueue([packageJsonFolder]);
+    const packageJsonFolderPathQueue: AsyncQueue<string> = new AsyncQueue(packageJsonFolders);
 
     await Async.forEachAsync(
       packageJsonFolderPathQueue,
@@ -624,9 +632,15 @@ export class PackageExtractor {
 
         // Replicate the links to the virtual store. Note that if the package has not been hoisted by
         // PNPM, the package will not be resolvable from here.
-        // Only apply this logic for packages that were actually installed under the common/temp folder.
+        // Only apply this logic for packages that were actually installed under the common/temp folder,
+        // and only when hoisting is enabled for the subspace.
         const realPnpmInstallFolder: string | undefined = targetSubspace?.pnpmInstallFolder;
-        if (realPnpmInstallFolder && Path.isUnder(packageJsonFolderPath, realPnpmInstallFolder)) {
+        const hoistingEnabled: boolean = targetSubspace?.pnpmNodeModulesHoistingEnabled !== false;
+        if (
+          hoistingEnabled &&
+          realPnpmInstallFolder &&
+          Path.isUnder(packageJsonFolderPath, realPnpmInstallFolder)
+        ) {
           try {
             // The PNPM virtual store links are created in this folder.  We will resolve the current package
             // from that location and collect any additional links encountered along the way.