Ideally you build at least one shipyard with multiple complexes in nearby sectors, so that you can build an entire bunch of Asgards and just roll over Xenon sectors - of course you need to find a hole in the NPC economy to exploit for that.
I do agree that X4 AI is stupid, every now and then one of my Asgards decides that their fuckin’ death star laser isn’t enough to destroy a station and gets up close to hit 'em with their sword (which did cause me to give up and stop playing indefinitely).
X3 is not that much better with ship AI, but at least stations don’t fight back and the sheer number of existing sectors makes it ok to have a few overrun ones.