In a cold bowl, combine the softened cream cheese and powdered sugar. Use an electric hand mixer or stand mixer with whisk attachment to blend them together until smooth and well incorporated.

Once smooth and creamy, add the cold heavy cream and vanilla extract. Start at low speed to prevent splattering and increase to medium-high speed once thoroughly mixed.

Whisk until the mixture thickens and reaches a creamy consistency. You should see soft but stiff peaks forming as the cream thickens. This process may take a few minutes, so be patient.

Once the stabilized whipped cream with cream cheese is ready, it can be used immediately to top your favorite desserts or refrigerated until needed.