diff --git a/src/backend/base/langflow/custom/custom_component/component.py b/src/backend/base/langflow/custom/custom_component/component.py
index f7c7882bb..44ecfd51b 100644
--- a/src/backend/base/langflow/custom/custom_component/component.py
+++ b/src/backend/base/langflow/custom/custom_component/component.py
@@ -539,7 +539,6 @@ class Component(CustomComponent):
             raise ValueError(msg)
         return_types = self._get_method_return_type(output.method)
         output.add_types(return_types)
-        output.set_selected()
 
     def _set_output_required_inputs(self) -> None:
         for output in self.outputs:
@@ -851,7 +850,6 @@ class Component(CustomComponent):
                 continue
             return_types = self._get_method_return_type(output.method)
             output.add_types(return_types)
-            output.set_selected()
 
         frontend_node.validate_component()
         frontend_node.set_base_classes_from_outputs()
diff --git a/src/backend/base/langflow/custom/utils.py b/src/backend/base/langflow/custom/utils.py
index c6027c71f..448681e3d 100644
--- a/src/backend/base/langflow/custom/utils.py
+++ b/src/backend/base/langflow/custom/utils.py
@@ -380,7 +380,7 @@ def build_custom_component_template_from_inputs(
         return_types = cc_instance.get_method_return_type(output.method)
         return_types = [format_type(return_type) for return_type in return_types]
         output.add_types(return_types)
-        output.set_selected()
+
     # Validate that there is not name overlap between inputs and outputs
     frontend_node.validate_component()
     # ! This should be removed when we have a better way to handle this
diff --git a/src/backend/base/langflow/initial_setup/setup.py b/src/backend/base/langflow/initial_setup/setup.py
index 1ba447977..745fabdeb 100644
--- a/src/backend/base/langflow/initial_setup/setup.py
+++ b/src/backend/base/langflow/initial_setup/setup.py
@@ -64,7 +64,16 @@ def update_projects_components_with_latest_component_versions(project_data, all_
             is_tool_or_agent = node_data.get("tool_mode", False) or node_data.get("key") == "Agent"
             has_tool_outputs = any(output.get("types") == ["Tool"] for output in node_data.get("outputs", []))
             if "outputs" in latest_node and not has_tool_outputs and not is_tool_or_agent:
+                # Set selected output as the previous selected output
+                for output in latest_node["outputs"]:
+                    node_data_output = next(
+                        (output_ for output_ in node_data["outputs"] if output_["name"] == output["name"]),
+                        None,
+                    )
+                    if node_data_output:
+                        output["selected"] = node_data_output.get("selected")
                 node_data["outputs"] = latest_node["outputs"]
+
             if node_data["template"]["_type"] != latest_template["_type"]:
                 node_data["template"]["_type"] = latest_template["_type"]
                 if node_type != "Prompt":
diff --git a/src/backend/base/langflow/template/field/base.py b/src/backend/base/langflow/template/field/base.py
index 41775c59c..b01f0977e 100644
--- a/src/backend/base/langflow/template/field/base.py
+++ b/src/backend/base/langflow/template/field/base.py
@@ -224,9 +224,8 @@ class Output(BaseModel):
         if self.types is None:
             self.types = []
         self.types.extend([t for t in type_ if t not in self.types])
-
-    def set_selected(self) -> None:
-        if not self.selected and self.types:
+        # If no type is selected and we have types, select the first one
+        if self.selected is None and self.types:
             self.selected = self.types[0]
 
     @model_serializer(mode="wrap")
diff --git a/src/backend/tests/unit/test_schema.py b/src/backend/tests/unit/test_schema.py
index 4f8a1ca9f..c48431e05 100644
--- a/src/backend/tests/unit/test_schema.py
+++ b/src/backend/tests/unit/test_schema.py
@@ -127,11 +127,6 @@ class TestOutput:
         output_obj.add_types(["str", "int"])
         assert output_obj.types == ["str", "int"]
 
-    def test_output_set_selected(self):
-        output_obj = Output(name="test_output", types=["str", "int"])
-        output_obj.set_selected()
-        assert output_obj.selected == "str"
-
     def test_output_to_dict(self):
         output_obj = Output(name="test_output")
         assert output_obj.to_dict() == {