diff --git a/.chloggen/fix-version.yaml b/.chloggen/fix-version.yaml
new file mode 100644
index 0000000000..59b6724674
--- /dev/null
+++ b/.chloggen/fix-version.yaml
@@ -0,0 +1,16 @@
+# One of 'breaking', 'deprecation', 'new_component', 'enhancement', 'bug_fix'
+change_type: bug_fix
+
+# The name of the component, or a single word describing the area of concern, (e.g. collector, target allocator, auto-instrumentation, opamp, github action)
+component: target allocator, opamp
+
+# A brief description of the change. Surround your text with quotes ("") if it needs to start with a backtick (`).
+note: Fix version not being updated after version upgrade.
+
+# One or more tracking issues related to the change
+issues: [4378]
+
+# (Optional) One or more lines of additional information to render under the primary note.
+# These lines will be padded with 2 spaces and then inserted directly into the document.
+# Use pipe (|) for multiline entries.
+subtext:
diff --git a/internal/status/opampbridge/handle.go b/internal/status/opampbridge/handle.go
index b060299ee3..27d150b4b2 100644
--- a/internal/status/opampbridge/handle.go
+++ b/internal/status/opampbridge/handle.go
@@ -33,9 +33,12 @@ func HandleReconcileStatus(ctx context.Context, log logr.Logger, params manifest
 	}
 	changed := params.OpAMPBridge.DeepCopy()
 
-	if changed.Status.Version == "" {
+	// If the user provided a custom image we don't set the version.
+	// There is no guarantee that the custom image version matches the intended version.
+	if changed.Spec.Image == "" {
 		changed.Status.Version = version.OperatorOpAMPBridge()
 	}
+
 	statusPatch := client.MergeFrom(&params.OpAMPBridge)
 	if err := params.Client.Status().Patch(ctx, changed, statusPatch); err != nil {
 		return ctrl.Result{}, fmt.Errorf("failed to apply status changes to the OpenTelemetry CR: %w", err)
diff --git a/internal/status/targetallocator/handle.go b/internal/status/targetallocator/handle.go
index 243b6ae138..f01a56b3f4 100644
--- a/internal/status/targetallocator/handle.go
+++ b/internal/status/targetallocator/handle.go
@@ -26,16 +26,19 @@ const (
 
 // HandleReconcileStatus handles updating the status of the CRDs managed by the operator.
 func HandleReconcileStatus(ctx context.Context, log logr.Logger, params targetallocator.Params, err error) (ctrl.Result, error) {
-	log.V(2).Info("updating opampbridge status")
+	log.V(2).Info("updating target allocator status")
 	if err != nil {
 		params.Recorder.Event(&params.TargetAllocator, eventTypeWarning, reasonError, err.Error())
 		return ctrl.Result{}, err
 	}
 	changed := params.TargetAllocator.DeepCopy()
 
-	if changed.Status.Version == "" {
+	// If the user provided a custom image we don't set the version.
+	// There is no guarantee that the custom image version matches the intended version.
+	if changed.Spec.Image == "" {
 		changed.Status.Version = version.TargetAllocator()
 	}
+
 	statusPatch := client.MergeFrom(&params.TargetAllocator)
 	if err := params.Client.Status().Patch(ctx, changed, statusPatch); err != nil {
 		return ctrl.Result{}, fmt.Errorf("failed to apply status changes to the OpenTelemetry CR: %w", err)