The most likely (written) source from which Alexander would have known of Cyrus would have been from the Κύρουπαιδεία (Cyropaedia, or "Education of Cyrus") of Xenophon, which presents an ahistorical/semi-mythical version of Cyrus as an idealized ruler. Xenophon had fought as a mercenary, part of the Ten Thousand, for the pretender Cyrus the Younger who modelled himself on his namesake and unsuccessfully tried to oust his brother, Artaxerxes II. Notably the accounts of Ctesias, who claims to have been Artaxerxes II's physician, are less positive toward Cyrus (the elder).

In any case, read almost any modern biography of Alexander, and it will proclaim in bold letters, "Alexander read and studied Xenophon extensively and admired Cyrus, having read the Cyropaedia". The truth of the fact is that most of the impression of Alexander having read Xenophon at all derives from the fact that Arrian, our best source on Alexander, has Alexander making numerous allusions to Xenophon and the Ten Thousand. The problem is that Arrian's biography of Alexander, the Αλεξάνδρου Ανάβασις, is modelled on one of Xenophon's works, the Ανάβασις (roughly "The march up-country"), and so we can't really treat the occasional allusions to Xenophon's Ανάβασις in it as all that valuable.

A big problem with much of the scholarship of Alexander is that it takes his unparallelled mastery of tactics and strategy as a given, and then works backwards from there*. Here Xenophon becomes a convenient device for explaining Alexander's mastery of strategy and tactics - not only had Xenophon written on this, he had himself fought for the Persians and thus had first-hand knowledge of their tactics. On the other hand, Xenophon's experiences were seventy years out of date by Alexander's day, and it seems rather ludicrous to suggest that Alexander would not have had access to more relevant and up-to-date intelligence on Persian tactics and strategy than the Ανάβασις, especially given the Great King's weakening hold on West Asia in Alexander's day.

*instead of putting more focus on factors like luck, e.g. the possibility of his successes being due to rather miraculously surviving repeated reckless charges at Dareios and his guard as his troops were being pushed back, despite the fact that he was nearly killed already at Granicus using this tactic; cf Cyrus the Younger, who scored a tactical victory in the decisive battle leading a charge at his brother after his Greek flank-commander refused his order to do so, but died in the process thus ending his bid for the throne).

Kieran McGroarty makes arguments along the same lines as my reasoning above in a (somewhat contrarian) article available at JSTOR, noting that the parallels between Xenophon's Ανάβασις and Alexander's life are greatly overblown. One of the few direct assertions that can be taken to mean Alexander had read Xenophon comes from the 4th-century AD writer Eunapius of Sardis, who wrote that "Alexander would not have been great if not for Xenophon." - but it doesn't even actually outright state he had studied Xenophon! McGroarty makes the interesting comment that the assumption of Alexander having read Xenophon results in part from the portrayal of Alexander as the essential Greek, even Athenian, as opposed to Macedonian, hero. The assumption of his erudition stems from a later tradition where the relationship between him and his tutor Aristotle, the essential Greek writer, is exaggerated and idealized. (Except, of course, that Aristotle was also Macedonian.) Was Xenophon necessarily part of whatever literary canon Alexander may or may not have been exposed to? He was certainly part of the canons later writers who wrote about Alexander drew on, but that doesn't tell us very much about Alexander himself. In fact McGroarty's analysis suggests that if Alexaner read the Ανάβασις, he didn't take his cues from it.

Probably the most interesting part of McGroarty's article, if less germane to this question, is where he argues that if there's one work of Xenophon's that circumstantial evidence indicates Alexander had read, it would be the relatively obscure text Αγεσίλαος, a hagiography of a Spartian king who invaded West Asia, and who Xenophon fought under. There are some parallels between Alexander's actions and Agesilaοs' dealing with locals in Xenophon's telling. If Alexander read one of Xenophon's hagiographies, well, maybe he read the other, too (viz, the Κύρουπαιδεία).

Probably the best (by which I mean, the only good) indication of Alexander having read the Κύροπαιδεία is that he supposedly adopted Persian dress and customs not only himself, but also forced his associates to do so. This is alleged in all sources, and as such it is at minimum an early tradition about Alexander. In the Κύρουπαιδεία, Cyrus forces his associates to adopt Median dress and customs. If we take for granted that Alexander did this, then that is perhaps a pretty good indicator that he had at least heard stories about Cyrus' doing so. Then again, it could also be the case that he was so awed by the wealth and power of the Persian empire, the ultimate monarchy, that adoption of its customs seemed the only logical step after making himself its king.

Still, Cyrus was not a particularly obscure figure in Classical writings. Ctesias, Herodotos and Xenophon all discuss him at various length. It seems unlikely that Alexander, whether he did read Xenophon or not, would have been completely unaware of Cyrus. On the other hand, the idea that he admired and consciously modelled himself on Cyrus is probably taking it too far (at least in terms of what is actually supportable by the evidence), and as McGroarty notes, this is a flaw most of the modern monographs on the Macedonian warlord have in common.

EDIT: Another comment mentions something I can't believe I forgot about: the anecdote that Alexander was furious to find Cyrus' tomb destroyed and paid to have it restored, particularly in Arrian. According to Arrian this anecdote comes from Aristobulos, who claims that Alexander personally commisioned him to restore the tomb. Aristobulos, when quoted by surviving sources, is often noted as presenting an Alexander with great pathos, and is generally more hagiographical than other sources (e.g. he justifies Alexander's notorious drinking habit and says that his killing of Cleitos was Cleitos' own fault). Supposedly, according to Arrian's retelling,

[6.29.9] Alexander had always intended, after his conquest of Persia, to visit the tomb of Cyrus; and now, when he did so, he found that all it contained except the divan and the coffin had been removed.

This is one of those anecdotes which presents an Alexander with a marvellous prescience, who always expected to conquer the entire Achaemenid Empire rather than e.g. Asia Minor. Along with the prominent role played by Aristobulos in the story:

[6.29.10] Aristobulus tells us that he himself received orders from Alexander to put the monument into a state of thorough repair: he was to restore to tie coffin what was still preserved of the body and replace the lid; to put right all damage to the coffin itself, fit the divan with new strapping, and to replace with exact replicas of the originals every single object with which it had previously been adorned; and, finally, to do away with the door into the chamber by building it in with stone, covered by a coat of plaster, on which was to be set the royal seal.

one has to take this with a pinch of salt. Indeed, Aristobulos presumably did not make the anecdote up out of whole cloth (Strabo quotes other sources on it which apparently contradict Aristobulos slightly on the exact nature and layout of the tomb), but the idea of Alexander's amazing prescience and Aristobulos' hagiographic tendencies casts the stated purpose of the visit into doubts. If I were to make an informed guess, I would say Alexander's intent may have been to plunder the "tomb of Cyrus", rather than "pay his respects", and was furious to see that someone had beaten him to it.

Strabo's version also drawing on Aristoboulos has him first visit the tomb intact, ordering Aristoboulos to decorate it, and then return later to find it looted. After that, Strabo notes that Alexander had the entire region of Persis looted and moved its riches to Susa, which again suggests that this may be the reason he was so furious to find the tomb plundered.

Finally, Quintus claims that Alexander had at first not intended to conquer the city of "Κύρουπόλις" ("City of Cyrus", in Central Asia) out of respect for Cyrus, but only did so because of the obstinacy of its inhabitants. Arrian, on the other hand, has Alexander rather unceremoniously capturing it along with two other nearby cities, killing its men, and enslaving its women and children. It seems like once again Aristoboulos uses "respect for Cyrus" as a fig leaf here, which means we should probably be really sceptical of reading this as reflecting Alexander's actual views. Obviously, this doesn't mean he wasn't aware of Cyrus, just that he didn't necessarily (in fact, I would say probably didn't) venerate him to the degree Aristoboulos suggests.

Did Alexander the Great read Xenophon?, Kieran McGroarty (2006) in Hermathena