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Free weights are by far more popular because its all natural movement. Usually with machines (unless you're doing tri pressdowns, seated rows, etc.), your movement is confined to whatever the machine is set to do. With free weights, you use your stabilizer muscles for balance. You vs. gravity - that's free weights.
For more muscle gain and stimulation, definitely free weights. BUT we often use machines as well to touch the muscle a little differently to avoid the muscle to get too use to your mouvements. Machines are guided mouvements, and this can also be useful when doing declined bench presses for ex (for balance!), or to work with the muscle definition with the cables.