Billionaire Ken Griffin, CEO of hedge fund Citadel Advisors, was busy during the second quarter. He and his team went shopping and substantially increased the firm’s stake in some stocks, while also buying new ones.

Some of the biggest names on Wall Street, including Microsoft (MSFT -0.02%) and Apple (AAPL 3.62%), were among the companies whose shares Griffin bought during the period.

These are two of the largest companies in the world by market cap that have generated life-changing returns over the long run. Both have also made moves in the fast-growing artificial intelligence (AI) market. But are these tech leaders still attractive to long-term investors with market caps above $3 trillion?

Let’s find out.

MSFT Total Return Level data by YCharts

1. Microsoft

During the second quarter, Citadel Advisors bought 1.87 million shares of Microsoft, increasing its stake in the company by 1,635.75%.

Griffin and his team aren’t the only ones who have been loading up on the tech leader. There is a reason why Microsoft has crushed broader equities this year and is up 32% since January. Microsoft’s financial results back that up. The company’s revenue and earnings have been growing at a good clip.

In the fourth quarter of its fiscal year 2025, ended on June 30, Microsoft’s revenue jumped by 18% year over year to $76.4 billion. Operating income grew even faster, reaching $34.3 billion, a 23% increase compared to the year-ago period. Net income climbed 24% year over year to $27.2 billion. In other words, Microsoft is capitalizing on growth opportunities while keeping costs under control.

Image source: Getty Images.

The tech giant’s most important business is currently its cloud unit, a segment that also offers a host of AI-related services and is growing sales faster than the rest of its business. Microsoft is gaining ground on Amazon, the leader in cloud computing. Although Amazon was first to market, Microsoft has been offering its Office 365 productivity tools (and other services) to businesses for a long time. It’s hardly a leap for these same companies to opt for a provider they already know and trust for their cloud needs.

And the best news is that this is still the early innings of cloud adoption, and for that matter, the AI revolution. As Andy Jassy, Amazon’s CEO, said, “85% of the global IT spend is still on-premises.”

Despite its massive size, Microsoft is poised for excellent long-term opportunities in cloud computing and AI. Add that to the company’s moat from switching costs, its excellent dividend program, and significant cash flow, and Microsoft looks like a no-brainer stock to buy right now.

2. Apple

Citadel Advisors’ stake in Apple increased by a whopping 10,715.95% during the second quarter. That seems like an odd move at first glance.

Apple has faced significant challenges this year, particularly the threat of tariffs. The company manufactures its products abroad, especially in China. With the Trump administration seeking to impose heavy tariffs on imported goods, the market has been concerned about what this will mean for Apple’s business.

Apple recently announced that it would increase its domestic investment in manufacturing to $600 billion over the next decade, in an attempt to appease the current administration and avoid tariffs.

However, Apple has other issues beyond that. The company’s Apple Intelligence — a suite of AI features and services it has released for its latest devices — has failed to impress consumers and investors. So, the iPhone maker is behind in this promising industry.

It’s due to all these factors (and others) that Apple’s shares have declined by 5% this year. However, Griffin and his team clearly saw this as an opportunity to load up on the company’s shares.

In my view, although Apple may struggle for the next few years, the stock remains a solid long-term option. For one, the company’s business is still highly profitable. Apple’s revenue in the third quarter of its fiscal year 2025, ended June 28, increased by 10% year over year to $94 billion. The company’s earnings per share came in at $1.57, representing a 12% increase compared to the year-ago period.

Notably, Apple generates a substantial amount of cash. The company’s trailing-12-month free cash flow may be down 11.6% year over year, but it remains a considerable $96.2 billion.

AAPL Free Cash Flow data by YCharts

Apple can invest a substantial amount of money in R&D efforts that will ultimately yield results, including advancements in AI. The company has been late to market several times, only to create an innovative version of an already existing product and find massive success. That’s what it did with the iPhone and several products after that, including its AirPods. The difference is that Apple now has a more valuable brand name than it did then.

Apple has an army of loyal customers, an installed base of billions of devices, and a services segment with more than 1 billion paid subscriptions. Even a single highly successful device can have a significant impact on the company’s results.

Lastly, Apple could find ways to fend off the tariff threat. CEO Tim Cook did so during President Donald Trump’s first term. And there is no guarantee that Trump’s aggressive trade plans will survive his administration.

For all these reasons, the stock remains attractive, particularly for investors willing to hold it over the long term.

Generative AI, which creates original content using advanced algorithms like neural networks, is transforming industries such as art, healthcare, and finance. Key growth drivers include the rise of VR/AR technologies, deployment of large language models (LLMs), and demand for personalized content. Services in generative AI are gaining traction for scalability and cost-effectiveness. North America leads the market, while Asia Pacific emerges as the fastest-growing region, driven by investments in AI innovation. Challenges include combating deepfakes and misinformation, while trends like AI integration with robotics and democratization of AI platforms drive sector expansion. Key players, including Amazon, Microsoft, and OpenAI, are enhancing their competitive edge through strategic acquisitions and collaborations.

Dublin, Sept. 04, 2025 (GLOBE NEWSWIRE) — The “Generative AI Market: Analysis by Component, Technology, End User, and Region – Size, Trends and Forecasts to 2030” report has been added to ResearchAndMarkets.com’s offering.

The global generative AI market in 2024 was valued at US$20.21 billion. The market is expected to grow at a CAGR of approx. 37% during the forecasted period of 2025-2030.

Generative AI finds applications in various fields, including art, design, content creation, drug discovery, and natural language processing, where its ability to generate novel and diverse outputs contributes to innovation and problem-solving.

The global generative AI market is highly fragmented, characterized by the presence of numerous small and medium-sized companies competing for market share, and the presence of a substantial number of regional market players with limited business offerings and customer base.

The continuous growth of the global generative AI market can be attributed to several key factors. Firstly, the proliferation of virtual and augmented reality (VR/AR) technologies has propelled the demand for generative AI. These technologies rely heavily on realistic and immersive content, driving the need for advanced AI models capable of generating life-like visuals and interactive experiences.

Deployment of Large Language Models (LLMs) has emerged as another crucial driver. LLMs, such as GPT-3, have revolutionized natural language processing tasks, enabling the generation of human-like text, translation, and summarization. This adoption fuels the demand for generative AI solutions tailored to language-related applications. Moreover, the rising demand for creative and personalized content across various industries, including marketing, entertainment, and e-commerce, acts as a significant growth driver.

Furthermore, the healthcare and life sciences sectors are increasingly leveraging generative AI for various applications, such as drug discovery, medical imaging analysis, and patient data synthesis. These advancements contribute to improved diagnosis, treatment, and healthcare outcomes. Advancements in deep learning and neural networks play a fundamental role in driving generative AI market growth. Overall, the convergence of these factors fosters a conducive environment for the expansion of the generative AI market, facilitating innovation, and driving adoption across industries, and unlocking new opportunities for growth and development.

North America emerges as the largest region in the generative AI market, showcasing a promising landscape shaped by countries like the US, Canada, and Mexico, each with distinctive elements influencing their generative AI sector. Industry giants like OpenAI, Google, and Microsoft have significantly contributed to the region’s market, driving substantial investments in research and development to push the boundaries of AI capabilities. Both venture capital firms and tech giants are injecting billions into generative AI technology development, fostering innovation and market expansion.

This influx of capital has led to the creation of cutting-edge AI platforms, widely adopted across industries such as healthcare, finance, and entertainment. Moreover, the presence of leading market players and technology organizations, alongside a pool of experts, is anticipated to propel regional market growth, with the US expected to exhibit the fastest CAGR, fueled by increased adoption of deep learning and machine learning across diverse industries, including SMEs.

On the other hand, Asia Pacific emerges as the fastest-growing region in the generative AI sector, driven by a significant surge in AI technology adoption across various industries. With countries like China, Japan, India, and South Korea leading AI innovation, the region spearheads progress in generative AI technologies. The availability of vast data sets, particularly in language processing and computer vision, is crucial for training and improving GenAI models, with Asia Pacific’s large and diverse population providing a rich data source.

China dominates the industry, backed by significant investments in AI research, infrastructure, and talent development, with tech giants Alibaba, Tencent, and Baidu leading innovation across various sectors. Japan, renowned for technological prowess, hosts leading AI research institutions and companies, while India’s GenAI market is poised for significant growth, driven by skill development, research advancements, and government support initiatives. For instance, In July 2023, Singapore’s digital government agencies partnered with Google Cloud to develop GenAI capabilities in the public and private sectors.

Market Segmentation Analysis:

By Component: The report provides bifurcation of the global generative AI market into two segments namely, Software and Services.

Software Generative AI currently dominates the market as it encompasses a range of AI software tools, platforms, and applications tailored for generating content such as images, text, and music. These software solutions enable businesses to streamline processes, enhance creativity, and drive innovation. On the other hand, Services Generative AI is poised for rapid growth as businesses increasingly seek specialized assistance in implementing and leveraging generative AI technologies effectively.

Cloud-based generative AI services are expected to gain popularity as they provide scalability, flexibility, and cost-effectiveness, fueling the segment’s growth. For instance, in December 2023, Mistral AI, an artificial intelligence solutions provider, partnered with Google Cloud, optimized proprietary language models, and distributed both its open weights on Google Cloud’s AI-optimized infrastructure. As the demand for generative AI continues to rise, the services segment is expected to expand significantly to meet the growing need for expertise and support in this field.

By Technology: The report provides bifurcation of the global generative AI market into four segments namely, Transformer, Generative Adversarial Networks, Variational Auto-encoder, and Diffusion Networks.

The Transformer segment currently dominates the market due to its versatility and widespread adoption across various applications. Transformers, based on attention mechanisms, excel in tasks such as natural language processing, image recognition, and sequence generation. Their ability to capture long-range dependencies and model complex relationships has made them indispensable in numerous industries, including healthcare, finance, and entertainment.

Conversely, the Diffusion Networks segment is anticipated to experience fastest growth owing to its ability to generate high-quality images and text samples. Diffusion networks employ a diffusion process to generate outputs that closely match the distribution of training data, enabling the creation of realistic and diverse content. This capability makes them increasingly sought after in applications such as image synthesis, text generation, and creative content production, thus driving the growth in the forecasted period.

By End User: The report provides the bifurcation of the global generative AI market into six segments based on end-user, namely, Media & Entertainment, IT & Telecommunication, Healthcare, BFSI, Automotive & Transportation, and Others.

The Media & Entertainment segment held the highest share in the market and BFSI is expected to be the fastest-growing segment in the forecasted period. Generative AI in Media & Entertainment drives content creation, production, and enhancement, meeting the demand for immersive experiences and personalized storytelling. This technology’s adoption is fueled by the sector’s quest for high-quality content and engaging experiences to remain competitive amid evolving consumer preferences.

Conversely, the BFSI sector is embracing generative AI rapidly due to digital transformation initiatives and increasing demands for fraud detection, risk management, personalized customer experiences, and regulatory compliance. With countries like the UK, Spain, and Italy leading AI innovation, BFSI organizations are leveraging generative AI’s advanced capabilities in data analysis and automation to enhance operational efficiency and deliver tailored services. As the BFSI sector prioritizes digital transformation to address complex challenges, the adoption of generative AI is expected to soar in the coming years.

Competitive Landscape

Some of the strategies among key players in the market are new launch, mergers, acquisitions, and collaborations. For instance, on May 21, 2025, OpenAI announced the acquisition of io, an AI-hardware startup founded by Jony Ive, for US$6.5?billion, marking its largest acquisition to date and signaling a move toward integrated AI hardware-software solutions. Similarly, on May 19, 2025, Microsoft announced about amplifying its Azure AI ecosystem with new coding agents and partnerships (OpenAI, Nvidia, Elon Musk’s xAI), aiming to generate over US$13 billion in annual AI revenue.

Market Dynamics

Growth Drivers

• Expansion of Virtual and Augmented Reality

• Deployment Of LLM

• Increasing Demand for Creative and Personalized Content

• Enhanced Computing Power and Increased Availability of Data

• Growing Applications in Healthcare and Life Sciences

• Advancements in Deep Learning and Neural Networks

Challenges

Market Trends

• Integration of Generative AI with Robotics and Automation

• Democratization of AI Tools and Platforms

• Growing Integration With Cloud Computing

• Generative AI For Scientific Research

• Continued Innovation in Generative Adversarial Networks

• Emphasis on Explainable AI and Interpretability

• Automation and Efficiency in Enterprise Workloads

• Focus on Ethical AI

• Chatbot-powered Customer Service

Key Players in the Global Generative AI Market: Business Overview, Operating Segments, Business Strategy

• Amazon.Com, Inc. (Amazon Web Services, Inc.)

• Microsoft Corp.

• Alphabet Inc.

• IBM

• Salesforce, Inc.

• Nvidia Corporation

• Accenture

• Cognizant Technology Solutions Corporation

• Capgemini

• Adobe Inc.

• Infosys

• SAP SE

• Synthesis AI

• D-ID

• OpenAI Inc.

For more information about this report visit https://www.researchandmarkets.com/r/nhnb78

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