You're right, they seem to have a huge set of stones right now. Why would they want to poke the hornet's nest with a stick? Obviously they feel that have some kind of advantage against us.
Well, for one thing, they probably believe that the Mahdi is about to appear. Remember that the prophecies about the Ramadan eclipses and the Mahdi are primarily Shia beliefs, even though some Sunnis believe that as well. If the Mahdi appears, then they have Allah fighting on their side.
But they may well have more secular reasons for confidence ... nukes? Biochem? However I don't think they have any idea what's likely to happen to them if they try it ... they'd probably be turned into a sea of glass.