Plex sucks on the Apple TV (and likely most other devices) because unless the video fits in a very narrow band of codecs (AVC, maybe HEVC with DD audio) it's going to insist on transcoding the video.

The absolute best setup I've found is Infuse (https://firecore.com/infuse) with Plex as the backend. Infuse will ALWAYS request the raw video/audio stream and does all the decoding on the Apple TV, so your Plex machine can be very modest (it's never transcoding, after all).

You can also forego Plex and just have Infuse index all the content, but I've found that it's nice to have a single Plex backend that can be shared amongst multiple Apple TVs, iPads, etc.