Quick Answer: The best way to manage state in a Next.js app without causing slow renders is to keep state as local as possible, separate server state from UI state, and avoid making the entire app subscribe to a single global store. In practice, that means using React Server Components for data fetching where possible, colocated component state for ephemeral UI, and a lightweight external store only for truly shared client state with selector-based subscriptions to limit re-renders.
In Next.js, render performance usually degrades when data, UI state, and server-fetched state are all pushed through the same broad client-side state layer. The highest-performing architecture is to treat each state type differently: keep transient UI state inside the component tree, fetch server data in Server Components or route handlers, and use a narrowly scoped client store only for shared interactions such as auth, cart, or workspace context. To prevent unnecessary updates, prefer state libraries and patterns that support fine-grained subscriptions, memoized selectors, and structural sharing so that only the components that actually depend on a value re-render. This approach aligns with Next.js App Router best practices and typically outperforms a monolithic Context-based setup for medium to large applications.