Here is a simple request for this, you can simply achieve this using OUTER APPLY
CREATE TABLE
INSERT INTO
('ABC', 0, '2017-01-01'),
('ABC', 0, '2017-01-01'),
('ABC', 0, '2017-01-01'),
('ABC', 2, '2017-01-01'),
('ABC', 0, '2014-02-01'),
('ABC', 0, '2013-02-01'),
('ABC', 3, '2013-01-01'),
('ABC', 0, '2017-01-01'),
('ABC', 0, '2017-01-01'),
('ABC', 0, '2017-01-01'),
('ABC', 0, '2017-01-01'),
('ABC', 7, '2017-01-01')
UPDATE t SET t.col2 = t2.col2
FROM
OUTER APPLY(SELECT TOP 1 col2 FROM
OUTPUT :
rn col1 col2 col3
1 ABC 2 2017-01-01
2 ABC 2 2017-01-01
3 ABC 2 2017-01-01
4 ABC 2 2017-01-01
5 ABC 3 2014-02-01
6 ABC 3 2013-02-01
7 ABC 3 2013-01-01
8 ABC 7 2017-01-01
9 ABC 7 2017-01-01
10 ABC 7 2017-01-01
11 ABC 7 2017-01-01
12 ABC 7 2017-01-01