Preheat your oven to 375°F (190°C). Spray a 9×13 inch baking dish with nonstick cooking spray and set aside.

Cut chicken breasts into thin strips, about half an inch wide. In a small bowl, mix the fajita seasoning, garlic powder, cumin, smoked paprika, salt, and black pepper. Toss the chicken strips in the seasoning blend until evenly coated.

Heat olive oil in a large skillet over medium-high heat. Add seasoned chicken strips and cook for 3 to 4 minutes on each side until lightly browned but not fully cooked. Remove chicken from the skillet and set aside.

In the same skillet over medium heat, add the sliced bell peppers and onions, cooking for 4 to 5 minutes until softened and slightly caramelized.

In a large mixing bowl, combine the softened cream cheese, cream of chicken soup, sour cream, and salsa, whisking until smooth.

Add the seared chicken strips and sautéed peppers and onions to the creamy mixture, stirring until well combined. Gently fold in one cup of the shredded cheese blend.

Pour the mixture into the prepared baking dish and spread it evenly. Sprinkle the remaining one cup of shredded cheese over the top.

Cover with aluminum foil and bake for 20 minutes. Remove the foil and bake for another 10 minutes until the cheese is melted, bubbly, and lightly golden.

Remove from the oven and let the casserole rest for 5 minutes before serving.