Bring a large pot of salted water to a boil and cook the spaghetti according to package directions until al dente. Drain well and set aside. Do not rinse the pasta.

While the pasta cooks, heat the olive oil in a large 12-inch skillet over medium heat.

Add the chopped onion, bell pepper, and sliced mushrooms to the skillet. Sauté for 5-7 minutes, stirring occasionally, until the vegetables soften and develop color around the edges.

Reduce heat to medium-low. Stir in the cream of chicken soup, sour cream, garlic powder, onion powder, and milk. Whisk until smooth with no lumps. Cook for 2-3 minutes, stirring frequently, until heated through and slightly thickened.

Add the shredded chicken and 1/2 cup of the Monterey Jack cheese to the sauce. Stir well and cook for 2-3 minutes until the cheese melts completely and the chicken is warmed through.

Add the drained pasta directly to the skillet and toss everything together using tongs or two large spoons until every strand is coated with sauce. Taste and adjust seasoning with salt and pepper as needed.

For stovetop version: Sprinkle remaining cheese on top, cover pan for 1 minute to melt, garnish with parsley, and serve immediately.

For baked version: Preheat oven to 350°F (175°C). Transfer pasta mixture to a greased 9×13-inch baking dish, spreading into an even layer. Sprinkle remaining Monterey Jack and all of the cheddar cheese evenly over the top.

Bake uncovered for 20-25 minutes until cheese is melted, golden, and bubbly around the edges. Let rest 5 minutes before serving. Garnish with fresh parsley.