Quick Answer: Use Next.js Server Components by default for any UI that does not require browser interactivity, state, or event handlers. Server Components render on the server and are never shipped as client-side JavaScript, which directly reduces bundle size, improves Time to First Byte, and keeps only truly interactive parts in Client Components marked with "use client".
Next.js Server Components let you move rendering, data fetching, and heavy dependency usage to the server so the browser receives less JavaScript and a faster initial experience. The practical strategy is to structure pages so that static layout, content blocks, SEO metadata, database queries, and complex transformations stay in Server Components, while only interactive UI elements such as forms, modals, filters, and click handlers are isolated into small Client Components. This reduces hydration overhead, limits dependency duplication, and improves performance metrics like LCP and INP without sacrificing interactivity where it matters.