Meta Platforms is facing its biggest legal challenge yet in a trial that could lead to a penalty of more than $1 trillion. Shareholders still seem relatively unbothered, but that could change.

Opening statements are due Tuesday in a California federal court, where a coalition of 29 states is seeking damages for alleged harm to young users. Attorneys general from California, Colorado, Kentucky, and New Jersey are leading the case. According to Meta's calculations, the states are set to ask the court for up to $1.4 trillion in damages, nearly as much as Meta's market value.

Meta shares were down nearly 3% on Tuesday, but the drop came amid a wider slump in technology stocks. Investors seem convinced either that Meta will win its case or that the penalty will be much less than the worst-case scenario.

"We do not expect the Judge to award anywhere close to the State AG's initial $1.4T damages request," wrote Thomas Claps, a managing director at Gordon Haskett Research Advisors, in a research note. "However, Meta is still facing the threat of significant damages-as well as injunctive relief/changes to Meta's business practices-if it doesn't settle this trial."

The issue for Meta is that even a settlement far short of the potential damages is unlikely to spell the end of its legal troubles. As Barron's has previously written, Meta and other companies that run social-media sites face a wave of lawsuits filed by teenagers, school districts, and state attorneys general.

Even if the judge doesn't award a $1.4 trillion penalty, Meta could still be left bruised by the latest trial.