diff --git a/CHANGELOG.md b/CHANGELOG.md
index 63173aedb..6c0a92b65 100644
--- a/CHANGELOG.md
+++ b/CHANGELOG.md
@@ -3,6 +3,7 @@
 #### Fixed
 
 - [#1318](https://github.com/rails-sqlserver/activerecord-sqlserver-adapter/pull/1318) Reverse order of values when upserting
+- [#1321](https://github.com/rails-sqlserver/activerecord-sqlserver-adapter/pull/1321) Fix SQL statement to calculate `updated_at` when upserting
 
 ## v8.0.5
 
diff --git a/lib/active_record/connection_adapters/sqlserver/database_statements.rb b/lib/active_record/connection_adapters/sqlserver/database_statements.rb
index b1cacc3e4..0473afb8e 100644
--- a/lib/active_record/connection_adapters/sqlserver/database_statements.rb
+++ b/lib/active_record/connection_adapters/sqlserver/database_statements.rb
@@ -585,7 +585,7 @@ def joining_on_columns_with_uniqueness_constraints(columns_with_uniqueness_const
         def build_sql_for_recording_timestamps_when_updating(insert:)
           insert.model.timestamp_attributes_for_update_in_model.filter_map do |column_name|
             if insert.send(:touch_timestamp_attribute?, column_name)
-              "target.#{quote_column_name(column_name)}=CASE WHEN (#{insert.updatable_columns.map { |column| "(COALESCE(target.#{quote_column_name(column)}, 'NULL') = COALESCE(source.#{quote_column_name(column)}, 'NULL'))" }.join(" AND ")}) THEN target.#{quote_column_name(column_name)} ELSE #{high_precision_current_timestamp} END,"
+              "target.#{quote_column_name(column_name)}=CASE WHEN (#{insert.updatable_columns.map { |column| "(source.#{quote_column_name(column)} = target.#{quote_column_name(column)} OR (source.#{quote_column_name(column)} IS NULL AND target.#{quote_column_name(column)} IS NULL))" }.join(" AND ")}) THEN target.#{quote_column_name(column_name)} ELSE #{high_precision_current_timestamp} END,"
             end
           end.join
         end
diff --git a/test/cases/insert_all_test_sqlserver.rb b/test/cases/insert_all_test_sqlserver.rb
index c48dbeae6..6367d57d4 100644
--- a/test/cases/insert_all_test_sqlserver.rb
+++ b/test/cases/insert_all_test_sqlserver.rb
@@ -2,6 +2,7 @@
 
 require "cases/helper_sqlserver"
 require "models/book"
+require "models/sqlserver/recurring_task"
 
 class InsertAllTestSQLServer < ActiveRecord::TestCase
   # Test ported from the Rails `main` branch that is not on the `8-0-stable` branch.
@@ -27,4 +28,18 @@ def test_upsert_all_only_applies_last_value_when_given_duplicate_identifiers
                     ]
     assert_equal "expected_new_name", Book.find(112).name
   end
+
+  test "upsert_all recording of timestamps works with mixed datatypes" do
+    task = RecurringTask.create!(
+      key: "abcdef",
+      priority: 5
+    )
+
+    RecurringTask.upsert_all([{
+                                id: task.id,
+                                priority: nil
+                              }])
+
+    assert_not_equal task.updated_at, RecurringTask.find(task.id).updated_at
+  end
 end
diff --git a/test/models/sqlserver/recurring_task.rb b/test/models/sqlserver/recurring_task.rb
new file mode 100644
index 000000000..aecf7c462
--- /dev/null
+++ b/test/models/sqlserver/recurring_task.rb
@@ -0,0 +1,3 @@
+class RecurringTask < ActiveRecord::Base
+  self.table_name = "recurring_tasks"
+end
diff --git a/test/schema/sqlserver_specific_schema.rb b/test/schema/sqlserver_specific_schema.rb
index a5160f791..f4b600d64 100644
--- a/test/schema/sqlserver_specific_schema.rb
+++ b/test/schema/sqlserver_specific_schema.rb
@@ -360,4 +360,12 @@
       name varchar(255)
     )
   TABLE_IN_OTHER_SCHEMA_USED_BY_MODEL
+
+  create_table "recurring_tasks", force: true do |t|
+    t.string :key
+    t.integer :priority, default: 0
+
+    t.datetime2 :created_at
+    t.datetime2 :updated_at
+  end
 end