Paltrow, 42, spoke out about Stewart's criticism of her lifestyle website Goop at the Tuesday, Oct. 7 Most Powerful Women Summit in Laguna Niguel, Calif.
Stewart, 73, threw shade at the Oscar-winning actress last month during an interview with Net-a-Porter's The Edit. "She just needs to be quiet. She's a movie star," Stewart said. "If she were confident in her acting, she wouldn't be trying to be Martha Stewart."
Rather than feel upset, mom-of-two Paltrow insists she's flattered Stewart even considers her competition and revealed she's developed quite a thick skin when it comes to dealing with the outbursts of her critics.
"No one has ever said anything bad about me before, so I'm shocked and devastated," Paltrow said sarcastically. "I'll try to recover," she added.
"If I'm really honest, I'm so psyched that she sees us as competition. I'm so psyched. I really am," she said. "At this point in my life I don't take it personally," she said, explaining that at times she even learns "good things" from her critics.
Paltrow’s comments come days after she announced a new hire for her Goop brand — Martha Stewart Living's former president and CEO, Lisa Gersh.
Taking the helm as Goop CEO, Gersh paid tribute to Paltrow and her vision. "As a fan since its launch, I’ve admired the inimitable voice and style Gwyneth has infused into Goop, and the business she’s built," she said. "It’s rare to work with such an inspired founder and a digitally native company, a brand that thinks digitally from an organic point-of-view and successfully fuses content and revenue-generating retail."