If the cream cheese is cold, let the 3 ounces cream cheese sit at room temperature for 10–15 minutes to soften.
Prepare the avocados: halve and pit the 4 avocados, then scoop the flesh into a bowl and stir in the 1 teaspoon lemon juice to prevent browning.
In a food processor, add the softened 3 ounces cream cheese, the avocado flesh with lemon juice, 1 tablespoon garlic powder, 1 tablespoon pickled jalapeno peppers, 2 tablespoons chopped fresh cilantro, 2 teaspoons salt, and 2 cups sour cream. Process until smooth and creamy, stopping once or twice to scrape down the sides.
Drain the 10-ounce can Rotel diced tomatoes & green chilies and the 14-ounce can diced green chilies in a fine-mesh strainer to remove excess liquid.
Add the drained Rotel and drained diced green chilies to the food processor and pulse several short times until the tomatoes and chilies are incorporated but still slightly chunky; avoid overprocessing.
Transfer the sauce to a serving bowl and refrigerate briefly if you prefer it chilled before serving.